THE TARIFF 

AND 

THE TRUSTS 



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f^y^' 



The Tariff and the 
Trusts 



BY 
FRANKLIN PIERCE 

OF THE NEW YORK BAR 



THE MACMILLAN COMPANY 

LONDON : MACMILLAN & CO., Ltd. 

I913 

^iU rights reserved 



-AJ? HWw ^1 






Copyright, 1907, 
By THE MACMILLAN COMPANY. 



Set up and electrotypcd. Published January, 1907. Reprinted 
April, 1908; January, 1909 ; January, August, 1913. 






Berwick & Smith Co., Norwood, Mass., U.S.A. 



3 






PREFACE / 

Some years have elapsed since the publication of a 
work on our protective tariff system. The passage of 
the Wilson Bill in 1894 dampened the ardor of men 
who had convictions that the McKinley Tariff was 
unjust. After a full discussion of the merits of that 
bill, they saw the people vote for a change of policy 
and they saw the people's will defeated through the 
action of a few recreant Senators. Since that time 
other national issues have diverted attention, and the 
Dingley Tariff, imposing duties of nearly fifty per cent, 
upon dutiable imports and giving rise to hundreds of 
trusts, has continued to oppress the people. The ob- 
ject of this volume is to supply in simple form a clear 
statement of the flagrant wrongs of that tariff. It is 
idle with such a tariff existing to attempt a discussion 
of the general question of free trade. Simplification 
is the keynote to every public issue with a moral core, 
and the simple but comprehensive question which we 
shall discuss is the injustice of the Dingley Tariff. 
Since 1867 the prevailing rate of duties actually paid 
upon dutiable imports to our government has exceeded 
that of any other country in the world. In recent 
years, by means of our improved machinery and intel- 



yn PREFACE 

ligent labor, we have been able to produce most oi 
our highly protected products cheaper than any of 
our competitors. Prior to 1890 competition among 
domestic producers reduced the price of commodities 
considerably below the highest mark of the tariff bar- 
rier; but for the last seven years the trusts have sup- 
pressed this competition, and in many cases are now 
extorting from consumers the prices which prevailed 
for similar products in the fifties before the discovery 
of our rich ore fields or the advent of labor-saving 
machinery and the wonderful development of scientific 
processes. Taxes for public purposes, when reason- 
able and necessary, are an evil often grievous to be 
borne by the citizen, but a privilege of excessive taxa- 
tion by private corporations corruptly acquired from 
government is simply an outrage. 

Our people are unfortunate in the manner and time 
of discussing the tariff. We attempt in a single Pres- 
idential campaign the work of popular instruction 
which should be constantly going on. The people re- 
ceive their information on the tariff' at such a time 
when feeling runs high and the motive of speakers 
and newspapers to mislead them is strong. The in- 
spiring ring of a beloved party's war-cry or of a 
trusted leader's voice does not inspire a condition of 
mind in which to reason calmly upon the merits of the 
tariff. There are Democrats who are protectionists 
and who can be counted on to help block any reduction 



PREFACE vii 

of tariff duties. There are Republicans who deplore 
the existence of the Dingley Tariff and who agitate 
for a system of freer trade. I have therefore sought 
in this volume to present an array of concrete facts 
which condemn our tariff and to present them so fair- 
ly and so candidly that my readers, forgetting their 
party alliances, will remember only that they are citi- 
zens of this great democratic Republic which will live 
as long only as it secures to its people equality of op- 
portunity and protection from oppressive monopolies. 
Protectionists are wont in the discussion of the 
tariff to hold up before the citizen the wealth and in- 
dustrial strength of our country as a proof of the 
benefits of their system. It has always seemed to me 
that our great natural resources and industrial strength 
presented the very reason why a protective tariff was 
unnecessary, and therefore the reader must not be 
surprised that I accept the contention of protectionists 
as to our superiority in production and quote their 
words as the basis of my argument against the Ding- 
ley Tariff. The writer who opposes the despoiling of 
the people by this species of legislation is declared by 
protectionists to be a theorist, an idealist, a Utopian 
dreamer or a doctrinaire. Invariably he is charged 
with not basing his opinion upon facts. The diffi- 
culty is that men are given to accepting a partial pres- 
entation of facts for a complete one. General deduc- 
tions drawn from superficial comparisons of the con- 



viii PREFACE 

ditions of different countries are valueless. It is only 
by a wide survey of the tariffs of many countries and 
of their past and present conditions that we can hope 
to arrive at any correct conclusion on the matter. To 
the student the habit of appraising current events by 
their relations to the history of the past is most im- 
portant. One who does not know the history of our 
tariff from the earliest days cannot fully appreciate its 
terrible abuses in our own day. One who has not 
carefully read the heroic struggle for free trade in 
England more than sixty years ago has omitted im- 
portant history the reading of which will stir the pulse 
and fire the blood of every lover of justice. There- 
fore I have not only given many concrete instances 
and glaring examples of the inconsistencies and op- 
pressions of our protective system, but have also added 
historical sketches of our own tariff history and of 
that of England and Germany, our present commer- 
cial rivals. 

On such a subject, especially to one busily engaged 
in professional work, indebtedness to the suggestions 
of friends and works of others is necessarily very 
great, and it is impossible to do more than make a 
general acknowledgment of their kindness and aid ; 
special reference, however, should be made to Pro- 
fessor Taussig's ''Tariff History of the United States," 
to ''The Free Trade Movement in England and its 
Results'' by Professor G. Armitage-Smith, to "Protec- 



PREFACE ix 

tion in Germany" by William H. Dawson, and to 
"The Truth About the Trusts," by John Moody. 

New York, November ist, 1906. 

Franklin Pierce. 



CONTENTS 

CHAFTEB PAGS 

I. A Condition, Not a Theory .... 3 

II. The Trusts Resulting From the Protective 

Tariff and Leading to Socialism . . 47 

III. American and English Shipping . . .89 

IV. Protective Tariffs and Public Virtue , .117 
V. A Talk With Manufacturers • » . 148 

VI. A Talk With Laborers , . . . . 182 

VII. A Talk With Farmers 220 

VIII. Our Tariff History. . • • . « . 248 

IX. How England Got Free Trade • * • . 297 

X. The Tariff in Germany • • • . . 333 

XL The Remedy . • , o • . * • 366 

Index ...,••«*. 384 



xi 



The Tariff and the Trusts 

CHAPTER I 

A CONDITION, NOT A THEORY 

It has ever been the charge of men who have profit- 
ed by protective tariffs and special legislation that 
those who oppose such laws come to the people only 
with a theory unsustained by facts. Governor Cum- 
mins, of Iowa, recently said: "All the robberies and 
thefts committed by all the insurance officers since the 
life-insurance business was originated do not amount 
to the extortion due to the Dingley Bill for one year." 
If he has stated the condition correctly, and I believe 
he has, the most important consideration is to get the 
facts which establish it clearly before the public, and 
I propose to place before my readers some of the ter- 
rible abuses which have been caused by our protect- 
ive tariffs. 

Protectionist writers generally have viewed the 
subject of the tariff from the producer's standpoint. 
The trend and current of legislation in the United 
States for fifty years has been in favor of the produc- 

3 



4 THE TARIFF AND THE TRUSTS 

er and against the consumer, in favor of scarcity and 
against abundance, in favor of dearness and against 
cheapness. You would think from the current dis- 
cussion of economic subjects that the only matter of 
interest to the American people was the wealth and 
the prosperity of the great corporations, and that the 
welfare of the consumers, the great body of the peo- 
ple, was a matter of little importance. It seems to me 
that it is about time for a full review of the question 
from the standpoint of the consumer. 

Government cannot at one and the same tim^e be 
a fountain of generosity to the manufacturer and of 
justice to the consumer. Privilege in any country is 
not for the many, but for the few, for the simple rea- 
son that when privilege is -expanded to the consumers, 
who are the entire body of the people, it is no longer 
privilege. The richness of the soil and of mineral 
deposits and the natural advantages in our country 
have made the lot of man so fortunate, and the abso- 
lute freedom of trade between our states and terri- 
tories has tended to mitigate the burdens of protection 
so greatly, that the ordinary man, absorbed in his 
work, heeds but little the extortions which protective 
tariffs impose upon him until, perchance, hard tim-es 
come and he feels the sting of want. Again, our 
newspapers have given so much prominence in recent 
years to great fortunes rapidly accumulated, that the 
body of the people have become great admirers of 



A CONDITION, NOT A THEORY 5 

wealth and have come to measure the greatness of 
our country and its prosperity, not by an increase in 
the enjoyments of comfort on the part of the masses 
of the people, but rather by the rapid advancement of 
the few who dazzle them by the brilliancy of their suc- 
cess. We are apt to regard such success as a sign of 
national prosperity without giving a moment's con- 
sideration to its cost to the many. The result is to 
rate low the rights of the whole people and to rate 
high the interests of a class. 

The theory upon which the Hamilton Tariff of 1790 
was imposed and, in the main, all subsequent tariffs 
until the Walker Tariff of 1846, was that the industry 
of the country was largely agricultural, and that it 
was of public importance that we have a diversity of 
industries, and to that end infant manufactures should 
be aided by the law until they were sufficiently estab- 
lished to be able to compete with foreign industries. 
The Morrill Tariff, however, enacted in the midst of 
the Civil War, sprang directly from the necessities of 
government for revenue, and the duties imposed upon 
foreign imports by that tariff have been increased by 
each new tariff, with one exception, since enacted. 
But a marvelous transformation and re-organization 
of industry has come within the last thirty years, and 
the result is that, as has been well said, we have "no 
more need for protection now, than a candidate for 
Congress has need of a baby's bottle." Our superior- 



6 THE TARIFF AND THE TRUSTS 

ity over any other people in the world in manufactur- 
ing has been attained during the last thirty years 
through the following factors : 

First: — The energy and enterprise of our people. 

Second : — Our inventive talent and the marvelous 
increase in labor-saving machinery. 

Third: — The bountiful supply of food and raiment 
for the support of workmen, and the unlimited stores 
of iron ore, copper, lead and other minerals as the 
raw material of manufacturing. 

Fourth: — Low tax rate as compared with our chief 
competitors in manufacturing, thereby lessening the 
burdens of industry. 

It may be that in some respects we overestimate our 
superiority to European people, but there is one respect 
in which our superiority to them never has been appre- 
ciated fully by our people. We have the most un- 
ceasing and resistless energy and activity ever found 
in any country in all history. Our American Yankee 
and his descendants have developed a degree of busi- 
ness capacity never known elsewhere among men. 
As to our people of foreign birth, every reader will 
appreciate that it is only the bravest and the strongest 
and the boldest who push out from their own country 
and brave the perils of the sea and of the strange land, 
and among these it is only the best who persist and 
become residents and citizens. These men bring the 
accumulated experience of their own countries crys- 



A CONDITION^ NOT A THEORY 7 

tallized into ideas with them, and so we gather as the 
common property of our American people the opinions, 
the customs and the traditions of all races, and thereby 
become a sort of mental clearing-house of the whole 
world. Every ambitious and adventurous tendency 
of our people is fostered as in a forcing-house by the 
restless, striving spirit that pervades the whole atmos- 
phere of American life. Where the men of other 
countries walk, we run. Where they find fault, we 
cry, ''Don't grumble, boost." Where they are con- 
tented to have their day's work equal any former one, 
we aim to beat the record. In England the laboring 
men are hostile to new machinery, do not give their 
"employers the benefits of their discoveries, and seem 
to believe that the employment of machinery is hostile 
to their interests. In Germany the laboring men are 
slow, plodding, methodical, without inventive talent, 
bound closely by traditions. In our country our 
native workingmen are the most intelligent, the most 
inventive, the most energetic which the world has ever 
produced, while our citizens of foreign birth, cut off 
from all their European surroundings, depending up- 
on their own energies for success, breaking with all 
the traditions of their country, are exhilarated and in- 
spired by the spirit of action which pervades the very 
air, and soon rank among our best workmen. The 
actual per capita production of the operative in the 
factories of this country, as will be shown in future 



8 THE TARIFF AND THE TRUSTS 

chapters, is at least twice as great as in the factories 
of any other country on the face of the earth. 

But the inteUigence and industry of our workmen 
are hardly to be compared in results with the marvel- 
ous increase in the use of labor-saving machines in 
this country during the last forty years. From the 
First Annual Report of the United States Commis- 
sioner of Labor, published about fifteen years ago, it 
appears that for a period of a few years before that 
date new machinery in the making of agricultural im- 
plements had displaced fully fifty per cent, of the 
manual labor employed in that industry. In the man- 
ufacture of boots and shoes the efficiency of labor had 
been increased in a short time more than fifty per 
cent. The Goodyears' sewing machine for :urned 
shoes, with one man, sews 250 pairs in one day. It 
would require eight men, working by hand, to sew 
the same number in the same time. By the McKay 
machine a single operator could handle 300 pairs of 
shoes daily, where, without the machine, he could 
handle but five pairs in the same time. In the man- 
ufacture of brooms nine men, aided by improved 
machinery, could turn out 1,200 dozen brooms weekly, 
while before the invention seventeen skilled men were 
only able to manufacture 500 dozen in the same time. 
In power machinery a weaver formerly tended a single 
loom at a time, but in a modern cotton factory, two 
operatives run 2,000 spindles at the rate of thousands 



A CONDITION, NOT A THEORY 9 

of revolutions a minute. In the days of the single- 
spindle handle wheel, one spinner, working 56 hours 
continuously, could spin five hanks of No. 32 twist, 
but with one pair of self-acting, mule-spinning ma- 
chines, having 124 spindles, one spinner, with the as- 
sistance of two small boys, could produce 55,098 hanks 
of No. 32 twist in the same time. Mr. Wright, writ- 
ing, as we have said, some sixteen years ago and tak- 
ing his facts from the first report of the Labor Bureau, 
said that it would require from 50,000,000 to 100,000,- 
000 persons in this country working under the old 
system to do the work performed by the workers of 
to-day with the aid of machinery. But the invention 
and use of machinery has greatly improved since the 
times described by Mr. Wright. In a Connecticut 
factory 70 machines, directed by one machinist, three 
operatives and one boy, produce 7,500,000 pins all 
placed in papers and ready for sale in one day. One 
hundred years ago a single man could only make 
4,800 pins in a day, while to-day he makes 1,500,000. 
The Nasmyth hammer is handled so deftly as to break 
an egg shell or crush hundreds of thousands of tons 
of molten iron. The compressed air drill, which years 
ago could only strike 25 blows a minute, strikes 500 
blows to-day. The excavators for removing the iron 
ore from the earth, the electric cranes, the immense 
transfer tables and gigantic machinery of the steel plate 
mills, all handle hundreds of tons weight as lightly as 



10 THE TARIFF AND THE TRUSTS 

you toss a toy. In the metal working art, wire-draw- 
ing, sheet-metal making, forging, the making of tools, 
springs, tin cans, needles, hooks and eyes, nails and 
tacks, automatic machines do the work. The molded 
trimmings, paneled doors, carved mantels and turned 
balustrades of our houses to-day are all made by 
machinery and at an insignificant cost; while clothes- 
pins, wood-trays, tooth-picks, matches, boxing ma- 
chines, corks, umbrella sticks, screw-driving machines, 
box-nailing machines, cigar boxes, paper and wooden 
boxes and a hundred other matters of like small kind 
are done almost entirely by machinery. We have the 
machines and we use them. It is not an uncommon 
event for our manufacturers after installing costly 
machinery to tear it out and send it to the scrap heap 
on learning of something better. The increase in the 
horse-power used in manufacturing between 1890 and 
1900 was ninety per cent. According to the census 
report of 1900 about 20,000,000 horse-power is em- 
ployed in manufacturing. Marvelous possibilities in 
manufacturing are opening up by the use of electricity. 
One man, by pressing a button or turning a knob, ac- 
complishes to-day tasks which 500 men would have 
found it difficult to accomplish even ten years ago. 
However, it may be said that these wonderful labor- 
saving machines are the common heritage of mankind 
and are found in all countries alike, and therefore do 
not insure us superiority over other countries in manu- 



A CONDITION^ NOT A THEORY II 

facturing. This is not so. We employ labor-saving 
machines to an extent unknown in any other country. 
Under our United States patent law a patent can be 
granted only for a new invention, while in most of the 
European countries it is not essential to the procuring 
of the grant that the invention is a new one. Taking 
into account this fact, observe our wonderful lead in 
the issuing of patents. Since the beginning of the 
American patent system in 1791, and before 1900, 
650,123 letters patent had been issued. More patents 
have been issued to American patentees than have been 
issued to Great Britain and France combined. More 
patents during that period have been issued in this 
country by 30,000 than were issued in all time to Great 
Britain, Belgium, Germany, Austria-Hungary and 
Spain combined. The following table will give the 
number of patents respectively issued prior to Janu- 
ary I, 1900: 

United States 650,123 

France 308,558 

England 278,129 

Belgium I54,i55 

Germany 126,1 14 

Austria-Hungary 82,933 

Canada 68,510 

Italy-Sardinia 49,990 

Spain 22,3 1 4 

We not only use the greater number of machines, 
but we have specialized labor by carrying to the 
farthest extent of any people in the world the employ- 
ment of a single man at a single process of the work. 



12 THE TARIFF AND THE TRUSTS 

The whole struggle for supremacy in manufacturing 
to-day is in the subdivision of labor and the use of the 
dynamo and automatic machines on the one hand and 
a greater proportion of hand labor upon the other. 
In both respects we lead the world, and in our facto- 
ries there is shown the greatest ability in the saving of 
labor and its expansion. Three or four years ago, a 
commission representing the trades unions of Great 
Britain, known as, The Moseley Commission, made a 
careful investigation as to our methods of manufactur- 
ing and made a report of the results of their investi- 
gation. I produce a question put to them and their 
answers thereto: 

Question 

Do you consider American factories better equipped 
for production than EngHsh? 

Answers 

Blast-furnacemen — Yes, very much better. 
Iron-founders — There is not a great deal of difference, 

but what little there is is in favor of the Americans. 
Iron and Steel Workers — There is no doubt that the 

leading mills of American manufacture are far 

ahead of our own best mills in their arrangement 

and output. 
Engineers — In some respects American workshops 

are better equipped than English. They are 



A CONDITION, NOT A THEORY I3 

equipped with a greater variety of special tools 
made for special work and repetition work. 

Shipbuilders and Boilermakers — The equipment of 
ship-yards and shops in other ways, that is in 
machinery, it not better than in Great Britain; in 
fact, better machinery can easily be found in the old 
country. 

Shipwrights — Speaking generally, and applying the 
question as to ship-yards, I do not think so. 

Sheffield Cutlers — Yes. There is a greater use of 
machinery and no expense is spared to secure any 
new device that will increase the output. 

Midland Metal Trades — Yes. 

Cotton Spinners — The only advantage is that a much 
better material is used. 

Cotton Weavers — American cotton mills are well 
equipped. 

Boot and Shoe Operatives — Some are, and, on the oth- 
er hand, many are not. The employers in America 
do not hesitate to invest in new machinery, and if 
It does not come up to expectations, they put it 
aside. Any fresh idea is worked for all it is worth. 

Leather Workers — ^Yes. 

Paper-makers — Yes. 

We are the greatest producers in the world of iron 

ore, of pig iron, of iron and steel manufactures, of 

hardware, of copper, of lead, of petroleum, of borax, 

of cotton, of corn, and of wheat. Our deposits of 



14 THE TARIFF AND THE TRUSTS 

iron ore are probably more extensive than those of all 
the rest of the world combined. The United States 
Steel Company and James J. Hill and the interests he 
controls, own or lease the great iron ore deposits of 
the Lake Superior regions. The United States Steel 
Company controls eighty per cent, of these deposits, 
and Mr. Schwab testified before the Industrial Com- 
mission that these deposits amounted to 500,000,000 
tons, and that if they sold their ore, it ought to be 
sold at a profit of $2 per ton, the modest sum of 
upwards of $1,000,000,000. Pig iron is the raw 
material of the entire iron and steel industry, and it is 
the barometer of general business, indicating the con- 
fidence or distrust of all the trades. In 1905 our 
production was nearly 23,000,000 tons of pig iron. In 
the month of March last, we produced 2,165,632 tons 
of pig iron, as much as that produced by any other 
two countries. At the present rate of production it 
is estimated by a writer in the Iron Age that we will 
produce 30,000,000 tons of pig iron during the present 
year. In 1895 the United States for the first tim-e 
produced more than half the world's total output of 
copper. The estimated production of 1905 was of the 
value of 943,000,000 pounds, an increase over the 
prior year of 130,000,000 pounds. We produced last 
year 340,000 tons of lead, and in 1904 more than one- 
half of the petroleum produced in the world, the whole 
production of petroleum being 9,303,000,000 gallons. 



A CONDITION, NOT A THEORY 1 5 

the production of the United States alone being 4,916,- 
000,000 gallons. We produce more than one-half of 
all the cotton and more than one-half of all the corn 
grown in the world. With such production of miner- 
als and such supplies of cotton and corn, is there any 
doubt about there being a sufficient basis for our in- 
dustrial leadership? 

Even under our existing national expenditure, which 
amounts to over $400,000,000 more during the last 
four years than in an equal period immediately prior 
thereto, the burden of national taxes in ratio to product 
does not exceed above $7 per head, or about three and 
one-half per cent, upon the value of the entire national 
product at its point of export and consumption ; while 
in the competing manufacturing countries of Great 
Britain, France, Germany and the Netherlands, this 
burden ranges from $12 to $18 per head. It is $18 
in the United Kingdom, $17 in France, and about $12 
each in Germany, Belgium, and Holland, and amounts 
to at least seven to fifteen per cent, of their product. 
Our people can make a net profit of four or five per 
cent, upon our entire national product before their 
competitors in the manufacturing states of Europe 
have been able to pay their taxes. 

All the world recognizes our easy industrial supe- 
riority. M. Leroy-Beaulieu, the eminent French writ- 
er, in his recent work, "The United States in the 
Twentieth Century," based upon our census report of 



l6 THE TARIFF AND THE TRUSTS 

1900, says : ''There can be no question of the industrial 
''primacy which she has held probably since an epoch 
"midway between 1880 and 1890. Yet, curiously 
"enough, the proportion of the population occupied in 
"industrial pursuits is much less than the proportion 
"of the population similarly employed in England, 
"Germany or France. . . . Absolutely, as well as rel- 
"atively, the number of people in Great Britain en- 
"gaged in industry is much higher than the number of 
"people so engaged in the United States, although the 
"value of the goods manufactured by the former is 
"not much more than half that of the goods made by 
"the latter. ... It can be explained only on the as- 
"sumption that the American workingman works hard- 
"er than the workingmen of other countries, or that he 
"receives more efficacious assistance from machinery, 
"or that both these conditions prevail. . . . We are 
"perfectly justified in concluding from them that the 
"work of an American workman is, on the average, 
"more productive than that of the British working- 
"man, and, a fortiori, than that of any other working- 
"man in the world. . . . American manufacture, 
"which, although of the most recent development, has 
"become for the reasons just stated the most powerful 
"in the world, may be said to typify modern manu- 
"facture conducted under the most favorable condi- 
"tions. The value of the products of manufactures 
"has increased more than six- fold during the last 



A CONDITION, NOT A THEORY I7 

"forty years, while at the same time the number of 
"workmen employed has less than quadrupled. Not 
"only have the great number of laborers, in propor- 
"tion to output, greatly decreased, but the number of 
"manufacturing plants in 1900 in the steel industry 
"and in the plants building agricultural machinery 
"have actually decreased in number, though the capital 
"employed has been multiplied many fold. . . . No 
"matter what may happen, the American iron and 
"steel industry in particular, will remain the first, the 
"most powerful, and the most progressive of all the 
"iron and steel industries in the world." 

Candidly, under the conditions described, can pro- 
tection in the United States be anything else but a 
crutch for limping incapacity, or a means of extortion 
on the part of the powerful combinations which take 
advantage of the tariff ? The inevitable result of such 
conditions in a country where there Is no interference 
with exchange between individuals and other coun- 
tries is an increased and an increasing abundance of 
all the necessaries of life, and this is only the natural 
result of such efficient labor as we have and our use 
of labor-saving machinery. But what Is the existing 
condition? Dun's Commercial Agency, which all will 
admit has no reason to exaggerate the facts, for many 
years has been carefully collecting data showing the 
per capita cost of living under seven different heads — 
bread-stuffs, meats, dairy and garden products, other 



l8 THE TARIFF AND THE TRUSTS 

food, clothing, metals, and miscellaneous. The sum 
of the totals of these give us what we may call the per 
capita wholesale cost of living each year, which is very 
much lower than the retail or actual cost, and does not 
include rent, recreation or luxuries. It does include 
whiskey and tobacco. According to Dun's figures, the 
per capita wholesale cost of living July i, 1897, was 
$72,455; January i, 1906, $104,464; June i, 1906, 
$106.794 — ^making the cost of living on June i, 1906, 
47.4 per cent, higher than July i, 1897. These are only a 
few simple figures, but it is sometimes interesting to 
have the painful testimony of our weekly bills con- 
firmed by statistics, and no elaborate exhibit could 
carry a more convincing indictment of the oppression 
of monopoly. At this rate of increase we will soon 
have to rate life itself among the luxuries. 

By ingenious methods a few hundred men have 
destroyed our chances for cheap commodities, and 
have been able to take the consumers' money, without 
their knowing it, under the specious guise of a protect- 
ive tariff. We imported in the year ending July I, 
1905, $570,000,000 of goods upon which import duties 
were paid. The average ad valorem rate of duty on 
these was 45.24 per cent., but during the same period 
the amount of our domestic commerce — that is, largely 
of products raised upon our soil, dug from our mines 
and manufactured in our factories, was about $20,000,- 
GOOjOOO, thirty-five times the amount which we im- 



A CONDITION, NOT A THEORY I9 

ported. Now observe carefully, what the tariff allows 
the home producer to do. The purchasers of the 
$570,000,000 of imports pay into the Treasury of the 
United States an average duty of 45.24 per cent. ; while 
the domestic producer, by reason of the tariff restrict- 
ing foreign importations, raises the price of like prod- 
ucts up to the duty line, and actually sells a consider- 
able proportion of the $20,000,000,000 of domestic 
products at a price enhanced by the amount of the tariff. 
This will be treated of more fully in the succeeding 
chapter. It is sufficient for the present to say, that for 
fifty years, the United States Government has been 
picking out favorites and bestowing upon them special 
privileges through the tariff, enabling them to sell their 
goods to the people of the United States at a price in- 
creased by nearly the amount of the tariff, notwith- 
standing the fact that during that period through the 
use of machinery the cost of production has been re- 
duced in many cases to a fiftieth part of what it was 
before i860. Yet to-day, under this iniquitous system, 
the producer has been allowed to continue the prices 
of commodities as they existed fifty years ago, and to 
absorb the results of his countrymen's labor to the 
amount of billions of dollars. 

A few illustrations of how these favorites of gov- 
ernment have been allowed to incorporate into the 
price of the product the amount of the tariff will be 
pertinent. From the year 1867 onward the duties on 



20 THE TARIFF AND THE TRUSTS 

manufactured woolen goods have averaged over 80 
per cent, and during the period covered by the Dingley 
and McKinley Tariffs the consumers of woolen manu- 
factures from abroad have had to pay a tax of no less 
than an average ad valorem duty of 92 per cent. Mr. 
Charles R. Miller, the 'editor of the New York Times, 
on the 20th day of April, 1900, in an address before 
the American Academy of Political and Social Science, 
at Philadelphia, said : 'Tf the axe of horizontal reduc- 
tion were laid in that spirit, not at the root, but at the 
tops of the Dingley Tariff, it would be strewn with 
the brushwood of unrighteous surplusage from many 
lofty schedules ; and the woolen schedule that kisses 
the very heavens with its audacious rates of 289 per 
cent, 235 per cent., 195 per cent., and 184 per cent., 
pierces the blue vault with one lone projection of 
379.94 per cent., and carries an average impost of 
86.54 per cent., would emerge from the visitation in a 
truncated and lopped-off condition that would evoke 
loud cries from the beneficiaries of those sinful taxes.'* 
Excepting for the three years 1894 to 1897, during 
which the Wilson Tariff was in operation, high duties 
have been imposed on imported wool averaging about 
44 per cent, during 37 years, and averaging during the 
existence of the present tariff not less than 52 per 
cent. — all for the purpose of protecting the flock- 
masters of Montana, Washington, Idaho and Wyo- 
ming who pasture their sheep over great ranges where 



A CONDITION, NOT A THEORY 21 

these "hoofed locusts/' as they are called, are destroy- 
ing the very soil, denuding the hills of trees, and thus 
impairing the patrimony of the nation. The total 
value of our wool clip rarely exceeds $60,000,000, 
about one and one-half per cent, of the total agricul- 
tural output of the country. One of the curiosities of 
this tariff on wool is that the duty on wool imported 
washed is twice the amount to which it would be sub- 
jected if imported unwashed; while the duty on wool 
which is imported scoured is actually three times that 
which is levied on the unwashed material, making the 
test a question of soap and water and putting a pre- 
mium on dirt and disease. Then the government, inas- 
much as it has given the hercers of sheep this high 
duty, gives to the manufacturers of wool a duty run- 
ning all the way from 80 to 250 per cent, to counter- 
balance the duty on wool. The duty on woolen goods 
under the Hamilton Tariff of 1790 was about 15 per 
cent. By the Act of 1824 it was raised to 30 per cent, 
in the first instance and to 33 1-3 per cent, after 1825. 
By 1828 the manufacture of woolen cloth in this coun- 
try, according to Professor Taussig in his work 
"Protection to Young Industries," had become secure- 
ly established. When the tariff of 1828 was in prep- 
aration a body of New England manufacturers 
visited Washington. Of their statements before the 
Congressional Committee on Ways and Means, Pro- 
fessor Taussig says: "The opinion was expressed by 



2,2 THE TARIFF AND THE TRUSTS 

several that the mere cost of manufacturing was not 
greater in the United States than in England. That 
the American manufacturer could produce at as low 
prices as the English if he could obtain his wool at as 
low prices as his foreign competitor." Nearly eighty 
years after, for the purpose of benefiting a few wool 
growers in the West and a body of woolen manufac- 
turers in the East, we have imposed three times the 
duty which existed in 1824. In England the consump- 
tion of wool per head has been steadily increasing for 
fifty years. In the United States the quantity of wool 
on the backs of our protected population is decreas- 
ing year by year. Here are the cold facts : 

Total U. S. wool Imports into U. S» 
consumption. of woolen goods. 

Population lbs. dols. 

1886 57,000,000 424,000,000 41,000,000 

1903 80,000,000 461,000,000 19,000,000 

The quantity of wool consumed in our mills in 1900 
was only nine-tenths of that consumed in 1890, and 
was about 20,000,000 pounds less than was used in 
1880, while the quantity of cotton used was 2,000,000 
pounds more than was used in 1890. The quantity 
of shoddy used in the making of woolen goods shows 
an increased consumption of about 15,000,000 pounds 
during the same period, the total consumption being 
about 66,000,000 pounds. In the hosiery trade, too, 
the tendency to cut down the quality and the price by 
using more cotton and less wool is just as marked. 



A CONDITION, NOT A THEORY 23 

In 1890 there was used in this industry less than four 
pounds of cotton to one pound of wool, while the pro- 
portion in 1900 was more than twelve pounds of cot- 
ton to one of wool. Although the population of the 
country increased between 1890 and 1900 nearly 
twenty-two per cent., yet the actual wool used in this 
industry declined about fifteen per cent. Before the 
Industrial Commission in February and May, 1901, 
witness after witness appeared in behalf of the man- 
ufacturers of woolen goods and asked that the duty 
on raw wool be removed, and urged upon the Commis- 
sion that if this duty was removed and a reasonable 
duty placed upon the imports of woolen goods, in that 
case the woolen manufacturers would become large 
exporters of woolen goods. Mr. Arthur Shadwell, 
in his work of the present year on ''Industrial Effi- 
ciency" and the comparative cost of living in the 
United States, Great Britain and Germany, the most 
thorough investigation upon the subject ever published, 
says: "A suit of clothes which can be bought for £2 
or £3 in England, cost £4 to £6 in America, and sim- 
ilarly with some other articles. An English work- 
man told me of his experience with regard to hats. 
He brought with him to the States a felt hat which he 
had bought for 7 shillings and six pence. When it 
got rather shabby he wanted to buy a new one and 
asked for a hat of the same quality. The price was 
28 shillings." 



24 THE TARIFF AND THE TRUSTS 

We produce about 11,000,000 bales of cotton annu- 
ally, which is more than the product of the rest of the 
world. Alongside of our cotton fields are scattered 
many of the factories where the cotton is woven into 
cloth, and the price of labor in those factories is less 
per day to each operative than it is in England. Yet 
our annual exports of manufactured cotton, consist- 
ing largely of coarse cloth from these Southern fac- 
tories, amounts to only about $50,000,000, while the 
exports of manufactured cotton goods from Great 
Britain, which carries its raw materials from our cot- 
ton fields across the Atlantic to its factories, is $300,- 
000,000. We have protected the cotton industries 
since 1816, when a duty of 25 per cent, was imposed, 
yet after eighty years of fostering this industry it is 
protected in 1905 by an average ad valorem rate of 
duty upon all dutiable imports of 49.40 per cent. 
Professor Taussig, in his ''History of the Tariflf," says : 
''Probably as early as 1824, and almost certainly by 
1832, the industry had reached a firm position, in 
which it was able to meet foreign competition on 
equal terms. Mr. Nathan Appleton, who was a large 
owner of cotton factory stocks, and who was also, in 
his time, one of the ablest and most prominent advo- 
cates of protective duties, said, in 1833, that at that 
date coarse cottons could not have been imported 
from England if there had been no duty at all, and 
that even on many grades of finer goods competition 



A CONDITION, NOT A THEORY 25 

was little to be feared." Now, more than sixty years 
after this industry had become firmly established and 
able to walk alone, it procures from our Congress an 
average duty of 49.41 per cent, upon all dutiable im- 
ports of cotton. We have simply impaired the 
strength of the cotton industry by coddling it. Will 
this weakly infant ever grow to independence? 

Sewing silk has been made in one way and another 
for over a century in this country. It was carried on 
in many of the Eastern states immediately after the 
Revolution as a household industry. By 1829 ma- 
chinery began to be invented and improved for its man- 
ufacture. Between 1852 and i860 the industry de- 
veloped rapidly, and the census of i860 reported the 
value of sewing silk to be no less than $3,600,000. 
Up till i860 Congress had not imposed protective 
duties upon the importation of foreign silk. Under 
the tariff of 1864 an average ad valorem duty of 60 
per cent, on imports of silk was imposed, and it con- 
tinued till 1883. From 1883 to 1897 the duty was 
50 per cent., and the Dingley Tariff increased that 
duty considerably, imposing such high duties on the 
cheaper silks as to be practically prohibitory. 

The duties upon imported woolen, cotton and silk 
goods are what are known as compound duties, impos- 
ing specific duties upon the yard and the pound and 
ad valorem duties upon the value, and resulting in 
much higher duties upon the lower priced commodi- 



26 THE TARIFF AND THE TRUSTS 

ties purchased by people of moderate means than up- 
on the higher-priced goods of the same class pur- 
chased by the wealthy. Thus, upon a class of Eng- 
lish dress goods made of a mixture of wool and cot- 
ton and costing 17 cents per yard in London a duty 
of 50 per cent, ad valorem and 44 cents a pound is 
imposed, equivalent to a duty of 305^ cents per yard, 
or 166 per cent. These goods retail in London for 25 
to 28 cents a yard and in the United States for 75 
cents per yard. In the same class of goods of a 
higher value, with the same apparent duty, costing 64 
cents a yard in London, a duty equivalent to 78 cents a 
yard, or 121 per cent., is imposed. So you will see 
that poor people buying the cheaper grade pay 45 per 
cent, more duty than the wealthier class purchasing 
the higher-priced goods. With regard to cotton 
goods, a yard of cheap quality of dotted swiss which 
costs 16 cents a yard in Paris and pays a duty of 35 
per cent, ad valorem and a specific duty of 3^ cents 
per yard, pays a duty equivalent to 9% cents a yard, 
or 58 per cent, of its cost price. Now, a finer quality 
of dotted Swiss purchased by the wealthier people, and 
costing 48 cents in Paris, is in the same class, and pays 
the same apparent duty of 35 per cent, ad valorem 
and 3^4 cents per yard, equivalent to a duty of 20 
cents per yard, or only 43 per cent, instead of 58 per 
cent, of the cost price. A yard of cheap silk and cot- 
ton mill, costing 8 cents a yard in Paris and paying a 



A CONDITION, NOT A THEORY 2,*J 

duty of $1.30 per pound, pays a duty of 80 per cent, of 
its cost price, while a finer grade of mull, costing 23 
cents a yard and paying the same duty, $1.30 per 
pound, pays a duty of 50 per cent, instead of 80 per 
cent, of the cost price. 

Not only does the tariff impose a higher tax upon 
the poor purchasing the cheaper grades than upon the 
wealthier people purchasing the better grades, but up- 
on the cheaper grades of goods not coming under the 
same apparent schedule specific duties are imposed 
upon the cheaper grades and ad valorem duties upon 
the costlier grades. Thus, in linings, cheap buckram 
pays a duty of ij4 cents per square yard, or 55 per 
cent, of the cost price, while the higher-priced organdie 
pays only a duty of 35 per cent, ad valorem. In vel- 
vets some of the expensive silk velvets pay a duty of 
only 50 per cent, whereas the cotton velvet used by 
the poor pays a duty of $1.50 per pound and 15 per 
cent, ad valorem, equivalent to 70 per cent. Running 
through the entire schedules of the tariff of 1897, in- 
volving thousands of articles, we find the use of spe- 
cific duties per yard and pound imposing high duties 
upon the cheaper grades of imported goods and duties 
from twenty to fifty per cent, lower upon the costly 
goods bought by wealthier purchasers. In a subse- 
quent chapter on Our Tariff History, under the title 
McKinley Bill, we have gathered a large number of 
illustrations of this injustice. The result of this 



28 THE TARIFF AND THE TRUSTS 

method of imposing duties is that nearly all the cheap- 
er grades of goods are actually prohibited from im- 
port, and the trust is thus afforded an opportunity to 
impose its prices upon the goods of the poor without 
the slightest competition from foreign imports. 

Pig iron and hammered iron were produced in the 
colonial days of the country so cheaply and with such 
abundance that the English iron masters were jealous 
of our superiority in its manufacture. Hamilton, in 
his famous "Report on Manufacturers,'' said: 'The 
continuance of bounties on manufactures long estab- 
lished must always be of questionable policy, because 
a presumption would arise in every such case that 
there were natural and inherent impediments to suc- 
cess.'' And, speaking of manufacturing industries 
which were then established in the United States, he 
says : "It is certain that several important branches 
have grown up and flourished with a rapidity which 
surprises," and among these he especially mentions 
pig and bar iron. Now observe that the protection- 
ists of the country hold up Alexander Hamilton as 
the man to whom they owe the protective policy of the 
country and Hamilton, the practical author of our 
protective system, creating a fiscal policy for his coun- 
try, knowing the exact condition of things, regarded 
the production of pig iron and bar iron as so well 
established in 1790 as not to be in need of protection. 
Of this Professor Taussig says: "No protection was 



A CONDITION, NOT A THEORY 2g 

attempted to be given to the production of pig iron or 
bar iron, for it was thought that the domestic producers 
would be able to compete successfully with their 
foreign competitors in this branch of the iron trade." 
One hundred and sixteen years later, possessing the 
greatest deposits of iron ore known in the world, with 
the most intelligent labor, with our foundries, plate 
mills, rail mills, tin-plate mills, and wire-nail mills, 
equipped more completely than any in the world; ex- 
porting as we do, according to the recent statistical re- 
port of James M. Swank, general manager of the 
American Iron and Steel Association, for the year 
ending July i, 1906, iron ore, iron and steel in the 
amount of over $143,000,000, home value, producing 
about half the product of pig iron in the w^orld, we 
impose an average ad valorem rate of duty of 49.46 
per cent, upon the entire schedule of iron and steel, 
and upon pig iron alone a duty of $4 per ton. Before 
the Tariff Commission appointed by the Conservative 
Government of England at the instance of Mr. 
Chamberlain in 1903, came as a witness Mr. J. S. 
Jeans, the Secretary of the British Iron Trade Asso- 
ciation, probably the best qualified to speak upon the 
comparative cost of producing steel in Great Britain 
and in the United States of any man in that country. 
Mr. Jeans testified : "Our own home market does not 
absorb more than 3,000,000 to 3,500,000 tons of steel 
a year, whereas the American market consumes nearly 



30 THE TARIFF AND THE TRUSTS 

i5,ocx),oc)0 tons, and the German market consumes 
nearly 5,000,000 tons. The much greater output of a 
given steel plant in the United States than in any other 
country is partly due to the more suitable composition 
of the iron used, partly to more speedy methods of 
charging furnaces, and partly to the use of molten 
iron. Even when the plant employed is fully up to 
date, as it is in many English works, the quantity of 
steel produced is less than one-half, and sometimes less 
than one-third, the quantity produced in the best 
American practice/' This agrees with the statement 
of M. Pierre Leroy-Beaulieu above, and shows be- 
yond any question that we are capable of manufactur- 
ing steel billets and rails at considerably less cost than 
can the iron masters of Great Britain, and that there 
is no reason whatever for the existence of our pro- 
tective duties on steel in any form. In fact, the Tariff 
Commission in England reported that the Americans 
were able to produce steel at much less cost than the 
English producers, and recommended a tariff for that 
reason upon all our products of steel. In 1877 the 
average price of steel rails in England was only a little 
over $28 per ton, while the duty on imports of steel 
rails into this country was $28 per ton. Even as early 
as 1877 steel rails could be made in this country as 
cheaply as in England, but that duty of $28 per ton 
continued until 1883; ^^d our domestic producers of 
steel rails sold them during that period at from $6i 



A CONDITION, NOT A THEORY 3I 

per ton to $67 per ton, making 100 per cent, yearly up- 
on the money invested. Congress knew this fact, or 
at least ought to have known it, but in the Dingley 
Bill it imposed a duty of $7.84 per ton upon steel rails, 
when for twenty years we had been manufacturing 
them cheaper than any other country in the world. 

The United States Steel Corporation is the greatest 
industrial giant on earth. Its total capitalization on 
December 31, 1903, was $1,442,714,114. This capital- 
ization was based upon actual assets at the time of its 
formation of not over $500,000,000. The only method 
of sustaining such a capitalization at a later stage in 
the Hodge suit was by estimating the iron ore prop- 
erties, the coal, coke and gas fields, and the limestone 
properties at $824,000,000, when, as a matter of fact, 
they were regarded at the time of their purchase or 
lease as less than half that value. The deposits of 
iron ore computed in this estimate at $700,000,000 are 
actually assessed by the Minnesota authorities for tax- 
ation at only about $40,000,000. For the two years 
ending December 31, 1903, its gross sales and earn- 
mgs amounted to $1,100,000,000. These, however, 
included sales from one subsidiary company to an- 
other, which were estimated as amounting to $300,- 
000,000, leaving $800,000,000 as the gross receipts for 
the two years. Its net profit for those two years was 
$242,479,916, leaving the total cost for the goods 
produced $558,000,000. This $242,479,916 profits 



32 THE TARIFF AND THE TRUSTS 

were the profits on 15,832,922 tons of finished steel 
goods, an average of $15.31 per ton, or over 40 per 
cent, of the total cost of the product. Mr. Byron W. 
Holt, the editor of Moody's Magazine, in 1904 pre- 
pared, in a publication of the American Free Trade 
League, the following schedule giving the amount of 
each of the sixteen products of the steel trust during 
the two years ending December 31, 1903, the amount 
of duty upon each product, and the whole amount of 
the tariff profit upon each product. 

Statistics of Production, from the Second Annual 
Report of the United States Steel Corporation for the 
two years ending December 31, 1903: 

Production 1902, Duty Rate Tariff 

1903. Tons. per Ton Profit 

Steel rails 3,855,101 $7-84 $29,635,000 

Blooms, billets, slabs, 

sheet and tin plate 

bars 1,275,929 6.72 to $105.48 9,920,000 

Plates 1,169,254 1 1.20 up 12,880,000 

Merchant steel, skelp, 

shapes, hoops, bands, 

and cotton ties 2,252,155 11.20 up 22,520,000 

Tubing and pipe 1,539,883 35% to 44.80 11,800,000 

Rods 21 1,029 8.96 up 1,800,000 

Barb wire 700,000 28.00 9,600,000 

Wire nails 800,000 11.20 up 8,250,000 

Other wire and products. 749,414 33.60 up 8,400,000 
Sheets — Black and 

Galvanized 738,791 21.16 up 8,760,000 

Tin plate 900,000 33.60 22,000,000 

Finished structural work. 950,721 11.20 10,000,000 
Angle and splice bars 

and joints 278,663 8.96 up 2,100,000 

Spikes, bolts, nuts and 

rivets 96,243 13.44 to 44.80 1,200,000 

Axles 256,503 22.40 up 2,880,000 

Sundry iron and steel 

products 59,236 11.20 600,000 

15,832,922 $162,345,000 



A CONDITION, NOT A THEORY 33 

Mr. John R. Dunlap, writing to the Evening Post 
of New York under the date of September 8, 1904, 
says of sales by the United States Steel trust in Eng- 
land and the United States: ''In the spring of 1903 I 
had occasion to get exact market quotations for vari- 
ous iron and steel products in free trade England 
and 'protection' America. The quotations were sup- 
plied by one of the oldest and most reputable New 
York firms engaged in iron and steel, and they were 
as follows, the quotation in each case being for a long 
ton of 2,240 pounds f.o.b. at Middlesboro and 
Swansea, England, and f.o.b. Pittsburg, Pa., the prices 
being those current during the first half of May, 1903 : 

England. United States. Dingley 

Duty 

Merchant bar iron $30.00 $48.10 $i3-44 

Bessemer billets . . . . . .^ . . . 20.00 30.00 6.72 

Bessemer pig iron 14.36 i9-35 4.00 

No. 3 foundry iron , 11.40 19-75 .4.00 

Gray forge iron 11.25 19.00 4.00 

Tank plates 30.91 38.08 i3-44 

Black plates 50.40 72.80 29.12'* 

Mr. Herman B. Butler, the vice-president and sec- 
retary of the firm of J. T. Ryerson & Son of Chicago, 
iron merchants, dealing largely in iron and steel in the 
form of bars, sheet plates, tubes, etc., appeared before 
the Industrial Commission, and the following ques- 
tions were asked him and the answers given: 

Q. What, then, is the use of the tariff ? 

A. You mean in reference to this at the present 
time ? 

3 



34 THE TARIFF AND THE TRUSTS 

Q. Yes, any time. When we have reached a point 
where we can produce cheaper than they can abroad 
what do we want a tariff for? 

A. I should say that when the price reaches that 
point the tariff ceases to be of any service to us. 

Q. This very statement you have made to that 
effect, that American goods are often sold abroad 
cheaper than they are sold in the United States, has 
been given as an argument in favor of a reduction in 
the tariff. Do you think that it is an argument in 
favor of the removal of the tariff? 

A. Well, if I were a manufacturer, I should say 
that that was not a sufficient argument ; but, as a tax- 
payer, I should say that it was. 

The duty on tin plate was 2 cents a pound under 
the McKinley Bill, i cent a pound under the Wilson 
Bill and is ij4 cents a pound under the Dingley Bill. 
There is no duty upon pig tin, there is no pig tin in 
the country. It takes two and one-fourth pounds of 
tin to coat one hundred pounds of tin plate. The tin 
plates are known as the black plates, and are produced 
by the United States Steel Company, which, since its 
incorporation, has owned the tin-plate industry. 
Therefore the raw materials with the exception of pig 
tin, are produced by the makers of tin plate and pro- 
cured at their lowest cost. Congress placed this high 
duty originally upon tin plate upon the statement of 
those who sought the duty that they could establish 



A CONDITION, NOT A THEORY 35 

the industry and sell tin plate to our consumers at a 
less price than it could be procured from the English 
manufacturers in Wales. To obtain the establish-' 
ment of this industry, according to a statement of 
Mr. Byron W. Holt, made in the fall of 1899, from 
the time of the enactment of the McKinley Bill until 
that date the tariff on tin plate had laid a burden of 
beween $80,000,000 and $90,000,000 on our consum- 
ers. At the time Mr. Holt wrote, and for some time 
prior thereto, the tin plate combination had an agree- 
ment with the makers of the machinery used in mak- 
ing tin plate not to furnish the machinery to independ- 
ent makers. Since that time the duty of ij^ per cent, 
has continued, and in June of the present year tin 
plate was being sold to dom-estic consumers at 65 
cents a box more than the same box of tin plate of the 
weight of one hundred pounds could be delivered from 
the mines in Wales. Up till the present time the 
American consumers have probably paid at least $125,- 
000,000 over and above what their tin plate would 
have cost them purchased abroad, to establish this in- 
dustry; and now, although the duty was imposed up- 
on the statement of the promoters of tin plate that 
they could establish the industry and sell tin plate at 
a lower price to our consumers than was charged by 
the Welsh manufacturers, we have positive proof that 
they have not performed their promises. In the fiscal 
year ending June 30, 1890, before the enactment of 



^6 THE TARIFF AND THE TRUSTS 

the McKinley Act of that year, we imported 674,664,- 
458 pounds of tin plate. Its cost in bond was $20,- 
746,427.73, or $3.o7>^ per hundred pounds. On 
June 1 1 of the present year one hundred pounds of 
tin plate cost $3.75 at the mill in Pennsylvania, or 
$3.93 at New York, nearly a dollar a box more than 
it cost in 1890. Is the steel trust an infant industry 
which needs protection? Is it necessary at this stage 
of the development of this industry to favor it by such 
high duties? Is it not even evidence of corruption 
to find such gigantic strength assumed by government 
as needing protection, while the consumer's inability 
to protect himself against the exactions of such a 
trust passes unheeded? Are we never to withhold 
the milk ration from the Pennsylvania nursery? Al- 
ready the baby has a suction power of many million 
horse-power. 

The average ad valorem rate of duty on sugar, 
as appears by the Department of Commerce and Labor 
Reports for foreign commerce in 1904, is 75.35 per 
cent. A considerable proportion of this duty is upon 
raw sugar. The protection on refined sugar which 
goes to the refiner is at least I2j^ cents per hundred 
pounds, and is claimed by Henry T. Oxnard of the 
beet sugar industry to be fully 50 per cent. In 1877 
the first sugar trust was formed, and since that time, 
although the machinery for refining sugar has been 
improved, and the methods of business also im- 



A CONDITION, NOT A THEORY 37 

proved, yet the price of refined sugar has been stead- 
ily maintained, while the price of raw sugar has ma- 
terially and steadily decreased. Since the passage of 
the Dingley Duty, according to competent experts we 
have been paying to the sugar trust, in the increased 
price of sugar by reason of the duty on refined sugar, 
at least $20,000,000 yearly over and above the sum 
paid by it to the government as a tarifif tax. The 
same authority computes that out of every dollar's 
worth of sugar that we buy, 40 cents is for tariff, a 
large portion of which remains with the trust. 

On December 20, 1900, there appeared before the 
Industrial Commission Mr. George H. Mayer, who 
had charge of the purchase of plate glass for the 
house of John Lucas & Co., of Philadelphia — a house 
established in 1848 and well known all over the United 
States. Mr. Mayer testified that the Pittsburg Plate 
Glass Co., which controls eighty per cent, of the sale 
of all the glass in the United States, within the three 
years since the passage of the Dingley Bill in 1897 
had increased the price which John Lucas & Co. was 
obliged to pay them for plate glass in the amount of 
150 per cent. The duty on plate glass is about 80 
per cent, and, as will appear in a subsequent chapter, 
the jobbers were forbidden by the trust to purchase it 
abroad. Mr. Mayer was asked by the Industrial 
Commission : 

"Q. Will you take particular classes of glass and 



38 THE TARIFF AND THE TRUSTS 

show what the prices were two years ago, three 
months, six months and so on for the last two years' 
period ? 

"A. Yes; I can take a stated size and show you 
what it was worth three years ago and what it is to- 
day. I can give you that in detail now, so far as the 
domestic article is concerned, but I cannot with refer- 
ence to the foreign. I will gwe you three examples. 
Take size 12 by 60 — that is, 12 inches by 60 inches — 
the price two or three years ago was 75 cents a light ; 
to-day it is selling for $1.88. Size 24 by 60, the price 
two or three years ago was $240; to-day it is $6. 
Size 24 by 84, two or three years ago was selling at 
$4.44; to-day it is selling at $11.38. The basis that I 
take on the price two or three years ago is 90 per cent, 
discount ; the basis to-day is 75 per cent, discount. 

*^Q. Those are sizes in common use ? 

"A. Those are sizes largely in demand; in fact, 
those three sizes cover the greater part of the de- 
mand." 

The duty on window glass generally, both under 
the McKinley Bill and under the Dingley Bill, varies 
from i^ cents to 3 cents per pound, and averages 
about 2 cents per pound. This is generally equivalent 
to between 80 and 100 per cent, and often exceeds 
100 per cent. From i860 to 1890 prices in this coun- 
try declined an average of eight per cent., although 
foreign prices declined fifty- four per cent, from 1867 



A CONDITION, NOT A THEORY 39 

to 1890. The duties on pottery are about the same as 
upon window glass, although the first pottery manu- 
factory was established in South Carolina in 1765, and 
the industry in those days was of sufficient importance 
to cause alarm among the makers of pottery in Eng- 
land. 

The duty on beef and pork is 2 cents a pound. The 
duty on bacon and hams from 1880 to 1890 was 
2 cents a pound, by the McKinley and Dingley Bills 
it was made 5 cents a pound. In i860 butchers paid 
about the same for cattle as to-day, and they slaugh- 
tered them without the use of machinery, availing 
themselves in no respect of the numerous by-products 
which the meat packers of Chicago to-day so carefully 
save, and yet the prices of beef and pork, according 
to the tables of the R. G. Dun Mercantile Agency, re- 
ferred to above, show but little difference between the 
cost of meat to the consumers in i860 and the present 
time. 

The National Boot and Shoe Manufacturers' As- 
sociation in Boston recently announced that the price 
of shoes would have to be changed in the near future, 
unless something was done about the tariff on hides. 
What a few years ago was the $3.00 shoe is now the 
$3.50 shoe. The shoe industry is perfectly willing 
to relinquish 25 per cent., the import duty on boots 
and shoes, if it could be relieved of the 15 per cent, 
duty on hides. Ex-Governor Douglas, of Massa- 



40 THE TARIFF AND THE TRUSTS 

chusetts, tells us that this duty adds about 7 cents a 
pair to the cost of producing the grade of shoes which 
he manufactures. It puts $2,500,000 into the Treas- 
ury of the United States, and $7,000,000 of profit into 
the hands of the beef and leather trusts. 

Nearly every implement made by our hardware 
manufacturers is highly protected from foreign com- 
petition. Notwithstanding this fact, for twenty-five 
years these manufacturers of hardware have been 
shipping their product all over the world and selling 
it in competition with the productions of other coun- 
tries. A hardware merchant of fifty years' experi- 
ence in the trade, writing in the issue of the Iron Age 
of January 4, 1906, says : "It may be relied upon that 
the American hardware trade enjoys no ephemeral 
existence, does not depend upon the tariff or any other 
kind of legislation, but is solidly based upon national 
advantages and the national character, and therefore 
can never be seriously affected by foreign competition 
come from what quarter it may.'' If the success of 
the industry does not depend upon the tariff at all, if, 
as we shall hereafter show, our hardware merchants 
are selling their goods in Canada at prices considerably 
lower than in the United States and requiring the job- 
bers there to exact from the hardware merchants an 
agreement not to sell under certain prices lest it dis- 
turb their American trade, why should the duties on 
imports of hardware be continued? Do our hard- 



A CONDITION, NOT A THEORY 4I 

ware merchants expect that their American customers 
will continue to be fleeced and will enjoy being fleeced 
in the future? The imports of hardware of 1855 
were practically the same as in 1905. It is perfectly 
evident that all duties upon hardware are unnecessary 
for the prosperity of the manufacturers of hardware, 
and still they insist on keeping these duties upon the 
statute book and using the duties as a means of ex- 
torting money from the American people. 

We need lumber to build and repair our houses, 
which the vast stores of Canada are ready to furnish 
us, but the Dingley Tariff intervenes and says : ''First 
pay the extra $2 a thousand" ; and we hack down our 
own forests, dry up the sources of our rivers, destroy 
the supply of water for irrigation, and thus impair the 
power on which we must depend eventually to furnish 
us with electricity. We need steel and iron beams and 
girders for our buildings, but load them with heavy 
duties. We require cement in great quantities in the 
erection of buildings, and can make it probably as 
cheap as any other people; but before we can get a 
barrel of it the tariff tribute must be paid at the rate 
of 8 cents per hundred pounds, including weight of 
barrel and package. The Official Bureau of Labor at 
Washington, in its recent report, estimates that if a 
person built a house in the year 1905, he would have 
to pay 41.4 per cent, more for his materials than in 
the year 1897. That is, a house in which the material 



42 THE TARIFF AND THE TRUSTS 

cost $3,000 in 1897 would cost $4,242 for the same 
material in 1905. When you buy a jack-knife of 
foreign make for fifty cents, you pay about 150 per 
cent, duty thereon. When your wife buys a pair of 
the cheapest foreign scissors, she pays a duty of at 
least 100 to 150 per cent., and on the commonest table 
knives and forks of 100 to 200 per cent. The duty 
on a pound of Sumatra tobacco, the foreign cost of 
which is 75 cents, is only $1.85, or 384 per cent. Mr. 
John Sharp Williams recently presented in Congress 
a schedule which he had caused to be compiled from 
actual imports in the port of New York showing 57 
separate articles of import upon which the duties ran 
all the way from 100 up to 251 per cent. 

These duties are mysteriously incorporated in the 
price of about everything which the mechanic, the 
farmer, the house-builder and the housewife buy. 
They do not add a dollar to their worth, but are 
simply a private tax permitted by government to the 
safeguarding and increase of the income of profit of 
a few hundred manufacturers and wool-growers who 
have succeeded in maintaining for their own advantage 
this confusion between public and private right. We 
have constituted in this land of the free by our own 
suffrages a privileged order, which, instead of being 
exempt from the payment of taxes, as was the priv- 
ileged order in France at the time of Louis XIV and 
Louis XVI, itself, through the government, imposes 



A CONDITION^ NOT A THEORY 43 

private taxes on all of its fellow-countrymen. This 
tax decreed by government is devoted only in a small 
part to the maintenance of the expenses of govern- 
ment, but is imposed at the behests of a few men, and 
permits them to continue into the twentieth century 
the customs of France in the eighteenth century, when 
the lord laid dues upon the serf for his own advantage. 
Suppose that the government should pass a statute re- 
quiring every laboring man to work for a certain wage 
per day or requiring every producer of grain or wheat 
or corn or oats or hardware or any commodity pro- 
duced in this country to sell this product at a certain 
price below the market value, our people would de- 
clare this a usurpation of power, and the courts would 
declare the statute void, as impairing the obligation 
of contracts and the right to contract. Government 
does not do this, but is it not an equal usurpation of 
power to impose duties W'hich result in certain favored 
producers selling in a restricted market at an enhanced 
price which the citizen must pay or starve ? The con- 
dition has become so bad that our politicians dare not 
take a step back to a healthful condition lest that step 
cause such depression as to destroy their political aspi- 
rations. When you ask them to give up a single one 
of these terrible abuses, they fling up their hands and 
say, "If we open the case for discussion, the whole 
theory of protection will fall to the ground, and there- 
fore we must 'stand pat.' " This simply means that 



44 THE TARIFF AND THE TRUSTS 

the conditions are so bad that they fear to touch this 
foul ulcer of the Commonwealth lest it bring upon us 
a panic. 

Indirect taxation by means of a tariff is always an 
oppressive tax, because it is not imposed upon prop- 
erty, but falls upon the food or necessaries of life of 
the people; but when connected with such a tax and 
as a direct result of such a tax powerful industries are 
allowed to extort billions of dollars from the people 
of a country in enhanced prices, it is simply out- 
rageous. The hearths of the humble people of this 
land are not sacred when such injustice can be prac- 
ticed upon them without exciting public indignation. 
Every farmer who strings a fence or builds a barn, 
every house-builder or contractor, every person using 
iron or steel or glass or pottery, must pay tribute to 
the beneficiaries of this tariff. Even as I write thou- 
sands of farmers are trundling along in their farm 
wagons back from town and city to the farm with a 
reel of barb-wire, a keg of nails, a little iron or steel to 
be used upon the farm, some cutlery, hardware, glass- 
ware, tin ware or clothing for themselves or family, 
and each and every one of them has paid therefor a 
price enhanced by the tariff in an amount of from 30 
to 250 per cent. In the current issue of the Bulletin 
of the Department of Labor at Washington, we find 
a contribution from S. E. Forman, describing, with 
great minuteness, the life and expenditures of nineteen 



A CONDITION, NOT A THEORY 45 

selected families of the poorer class of laboring men. 
He tells us that they are representatives of many 
honest industrial citizens who help to make the world 
around us the pleasant place it is, yet these families 
are described as being upon the verge of starvation. 
His description brings a vision of thousands of fam- 
ilies — not individuals, but families — of fathers, moth- 
ers and children, ragged, pallid and ghastly, passing 
on during all these last fifty years of tariff extortion 
in never-ending procession from the cradle to the 
grave, each paying its tribute to this monstrous in- 
justice; and while the procession passes I hear the 
voice of one of our great industrial barons, protected 
on his bituminous coal product by a duty of 67 cents 
a ton, and I hear him say of himself and the others 
who are conducting the industries of this country that 
they are ''Christian gentlemen to whom God has com- 
mitted the property interests of the country." The 
wealthy beneficiaries of the tariff almost invariably 
identify themselves with Providence itself, and, in 
atonement for their wrongs to the American people, 
scatter millions indiscriminately in charity. Thomas 
Carlyle, speaking to the English people in the hungry 
forties before the Corn Law was repealed, said that 
he saw around him ''dingy, dumb millions, grimed 
with dust and sweat, with darkness, rage and sorrow, 
saying or struggling as they could to say : 'Behold our 
lot is unfair, our life is not whole, but sick ; we cannot 



46 THE TARIFF AND THE TRUSTS 

live under injustice; up ye, and get us justice/ " And 
this is the message which the facts detailed in this 
chapter bring to Congress. The American people do 
not want charity: they want justice and merely the 
commonest kind of common justice. "Up ye, and get 
us justice." 



CHAPTER II 

THE TRUSTS RESULTING FROM THE PROTECTIVE TARIFF 
AND LEADING TO SOCIALISM 

There is no novelty in our American trust. In the 
good old days kings would give their favorites 
monopolies at the public expense. Salt works, mines, 
quarries, and forests were regarded by all the ancient 
monarchs as crown properties. They were farmed 
out to favorites who undertook to pay therefor a cer- 
tain fixed rate, and were given full liberty by the 
monarch to make as much profit out of the transaction 
as they could. The natural result was a greatly in- 
creased price of the necessaries of life. The guilds 
of the Middle Ages were also a prototype of our 
modern trust. Before the nineteen century towns, 
districts and nations in Europe were everywhere sur- 
rounded with walls of legislative restrictions intended 
to keep out the monster, trade. Monopolies existed 
in the time of Martin Luther, and those who created 
and profited by them received from him severe censure. 
In his work entitled "Trade and Usury" he says : *'Un- 
less one is stupid, one must see that these organizations 
are nothing more than *monopolia/ When worldly 
law prohibits these combinations, so injurious to the 

47 



48 THE TARIFF AND THE TRUSTS 

whole world, I need say nothing of godly and Chris- 
tian Law. These industrial combinations do every- 
thing they please, raise and lower prices according to 
their own will, and to the injury of small merchants. 
They are like the pike who attacks small fishes in the 
water, acting as if they were the masters of God's 
creatures, and beyond all law, belief, and love. It is 
not to be wondered at that small merchants, not wish- 
ing to lose, comply with the wishes of these monopo- 
lies, for to receive a certain pfennig is better than an 
uncertain gulden." The Court of General Quarter 
Sessions of the Peace was the first Court established in 
the colony of New York. This Court opened August 
7, 1694, with Abraham De Peyster as presiding Judge. 
The first indictment found in this Court was against 
John Watson, who was accused of forestalling the 
market, and prosecutions for forestalling the market 
continued in New York for many years. 

Nor are the reasons given in our day for creating 
trusts new. Elizabeth granted patents or privileges 
to her favorites for the exclusive sale by each of them 
of the commodity mentioned in his patent. The 
patentees exacted oppressive prices for their com- 
modities, and a storm of indignation arose in England. 
When a delegate from the indignant Commons begged 
Elizabeth to recall the patents, the Queen replied: 
"Since I was Queen yet never did I put my pen to 
any grant but that upon pretext and semblance made 



THE TRUSTS 49 

unto me that it was both good and beneficial in gen- 
eral though a private profit to some of my ancient 
servants who had deserved well/' Ever since the time 
of Queen Elizabeth, governments, tempted to exercise 
arbitrary power in granting oppressive tariffs or au- 
thorizing monopolies and trusts, have ever maintained 
as did Elizabeth that they were ''good and beneficial 
to the subjects," and have not been wanting in finding 
a "pretext and semblance" of reason for their action. 
The English Common Law since the reign of 
Henry V has regarded combinations to control prices 
of commodities as opposed to public policy. In the 
case of the sugar trust several corporations engaged in 
the manufacture of sugar selected trustees and con- 
ferred upon them the right to conduct the business of 
manufacturing sugar, giving them the power to sus- 
pend the action of any corporation, to dismantle fac- 
tories, and to practically destroy the corporate life of 
any one of the corporations. The Courts of New 
York found sufficient evidence to establish an intent 
to combine the different corporations and control their 
action with the purpose of increasing the price of 
sugar, and for that reason, as well as for the reason 
that the power to suspend the operation of corpora- 
tions was placed in the hands of the trustees, held the 
combination void. The men connected with the 
sugar trust, however, having tasted the advantages of 
monopoly were not content to relapse into a system of 
4 



50 THE TARIFF AND THE TRUSTS 

competition. Without statutory authority a corporation 
could not invest its assets in the purchase of the stock 
of other hke corporations, and so the Legislature of 
the State of New York in the early nineties enacted 
a law permitting this to be done. A similar provision 
of law was enacted later in New Jersey, in Delaware, 
and many other states; and out of these state laws 
has arisen the modern corporation, either owning or 
controlling a vast number of corporations, and creat- 
ing a monopoly in the manufacture or sale of the nec- 
essaries of life. It is a matter worthy of notice, and 
a commentary upon legislation in these days, that the 
very Legislature in the State of New York which 
gave this right to a corporation to create a monopoly 
by the purchase and control of other corporations en- 
gaged in like business, enacted a most drastic statute, 
punishing any arrangement or combination whereby 
a monopoly in the manufacture, production or sale of 
any article or commodity in common use was created, 
and declaring such a monopoly a misdemeanor, punish- 
able by a fine not to exceed $5,000, or imprisonment 
for not longer than one year, or both said fine and 
imprisonment. By the statute allowing a corporation 
to purchase stocks of other corporations the Legisla- 
ture marked out the way for the creation of a monopoly 
and legalized it, and then turned around and at the 
same session, with a great cry against monopolies, 
passed a statute punishing the commission of that for 



THE TRUSTS 51 

which it had already provided. Other states then fol- 
lowed the example of New York and enacted similar 
statutes allowing the creation of monopolies and then 
providing for their punishment by rigorous penal laws. 
This is characteristic of American legislation. We 
legalize conditions out of which an evil arises and 
then attempt to suppress the evil by penal statutes. 
We provide for high duties upon foreign imports for 
the protection of home industries, and when a monop- 
oly controlling the home market results therefrom, 
then pass penal laws punishing the monopoly. In this 
way our politicians prove to the great combinations 
who furnish campaign disbursements for political 
parties their fidelity to monopolistic interests, while, 
by the penal statute, they assure the people that they 
are against trusts. By such legislative action great 
discretion and power are vested in the executive of the 
state or nation, and thus government is centralized 
and the rights of the whole people, as well as the 
power of government, are placed in the hands of a 
single man. 

Our protective tariff is the genesis of the trust. 
The trust comes out of it as naturally as fruit from 
blossom. Obviously the control of a market by a com- 
bination or trust is facilitated where the field of com- 
petition is artificially limited to one country since it 
is easier to combine the producers of one country than 
those of all countries, and to that extent all must con- 



52 THE TARIFF AND THE TRUSTS 

cede that the tariff encourages trusts. The natural 
result of high duties is to excite increased competition 
and to force production beyond its normal limit, then 
the trust comes in with a good excuse to stay competi- 
tion and to hold the price of the domestic protected 
product up to the duty line. To illustrate, let us as- 
sume that a single corporation produces the product 
of any protected necessary of life in this country, and 
it would be clear that that corporation could sell its 
protected goods at a price just below the cost of the 
foreign product plus the duty. In experience, how- 
ever, when a bill like the Dingley Bill is passed creat- 
ing high duties on competing products, it inspires the 
hope in thousands of people that they may avail them- 
selves of the tariff and make a fortune. They rush 
into competition with existing manufacturers, and the 
result is overproduction and the selling price of the 
manufactured article is liable to fall below the cost of 
the foreign article. The manufacturers find that they 
are losing a portion of the benefit of the increased 
duty, and seek by combination to stamp out competi- 
tion. Were it not for combination much of the unjust 
advantage which the tariff gives to the American 
manufacturer would not be made available. A simple 
illustration will make this point clear. A manufacturer 
of novelties, who has one factory in Connecticut and 
another in England, told me recently that he used a 
large amount of cotton elastic webbing in the course 



THE TRUSTS 53 

of his manufacture, and, although a duty of 40 per 
cent, on cotton elastic webbing existed, he could pur- 
chase his supply of webbing in Connecticut as cheaply 
as he could in England, the reason being that there 
was no trust in webbing in this country. Now, ob- 
serve the condition we have. Our great financiers 
who are managing the monopolies of to-day are the 
very men who go to Washington or send their agents 
there and seek, through representatives in Congress 
and party organizations to whom they have given 
campaign disbursements, an increase of the duties up- 
on imports. Having procured the increase, they 
themselves have become the cause of the condition 
where a trust becomes useful. The law they have 
procured naturally and necessarily induces thousands 
of men to go into manufacturing and creates undue 
competition ; then they make a great cry against ''cut- 
throat competition," and create a monopoly to destroy 
the very competition which results from the tariff act 
which they themselves procured. During the years 
1898, 1899, and 1900, 149 consolidated industrial cor- 
porations were formed, with a total capitalization of 
$3,784,000,000, or an average of nearly $36,000,000 
each. Each and every one of these corporations was 
as clearly and as positively violative of the spirit of 
the common law as was the sugar trust or the 
Standard Oil monopoly, but Congress first created the 
conditions out of which they came into existence, and 



54 THE TARIFF AND THE TRUSTS 

then passed a penal anti-trust law to punish the crea- 
tures of its own making. 

Another reason given in favor of the trust is the 
instability of trade conditions, and its existence is 
defended by alleging that it is a balance-wheel which 
checks the excessive fluctuations in the market. Since 
the formation of the great combinations fluctuations 
in the market have existed to such an extent as not 
to justify this claim of wholesome restraint. Pig iron 
soared up in 1899 to $25 per ton, in the following 
year the price settled to $14 per ton, in 1902 the price 
again mounted to $25 per ton, and it has been accom- 
panied by great fluctuations in price ever since. 
Money on call has been soaring all the way from 10 
per cent, to 125 per cent, for the last year, and the 
reason of these conditions is very apparent. The in- 
dustries of a country should be based upon the natu- 
ral laws of exchange. These laws when left unob- 
structed prevail with as much steadiness and certainty 
as the law of gravitation. Man comes in with his 
statutes obstructing the free exchange of commodities, 
and thereby lays an artificial basis for trade, with the 
result of uncertainty, fluctuating prices, unstable 
markets and bankruptcy. One has but to read Eng- 
lish history in the days of protection and our own 
history since the Civil War to see the instability and 
uncertainty in trade created by protective tariffs. Be- 
fore the repeal of the Corn Laws England experienced 



THE TRUSTS 55 

unstable markets, riots, strikes and bloodshed. Again 
and again Parliamentary inquiry was made into the 
causes of the distress which pressed so heavily upon 
both the agricultural classes and the operatives of the 
town. Prices of wheat fluctuated from 53 shillings 
in January, 1816, to 112 shillings in June, 1817, and 
by the following September it had fallen to 74 shillings 
a quarter. In our own country the depression which 
lasted from 1873 to 1879 resulted from overproduc- 
tion and an inability to sell the surplus in foreign 
countries. Manufacturers themselves give as a rea- 
son for the sale of commodities abroad for less than 
the prices prevailing at home the necessity of an out- 
flow to steady business. A people who can manufac- 
ture cheaply enough to largely export to foreign 
countries as a rule are not affected by great fluctua- 
tions in prices, since their customers are not the peo- 
ple of one nation but of many nations, and when the 
people of one fail others take their place, and thus 
trade is natural and steady ; but with us, where every 
few years there is a change in the tariff, the appre- 
hension of danger from a change keeps trade in un- 
certainty, and the tariff itself becomes a barrier against 
exports as well as imports, making impossible condi- 
tions of steadiness. 

Protectionists contend, however, that trusts exist 
in free-trade England, and that because of their ex- 
istence in that country the inference is justified that 



56 THE TARIFF AND THE TRUSTS 

our protective tariff is not the cause of the trust. In- 
dustrial combinations in the form of monopoHes do not 
exist to any considerable extent in England. There 
are, however, causes for the existence of combinations 
aside from protective tariffs which operate both in 
England and the United States. Any combination 
of men who obtain ownership or control of the natural 
supplies of a necessary of life has even a more com- 
plete foundation for monopoly than exists by reason 
of a tariff like ours. The whole supply of anthracite 
coal is confined to a small portion of the State of 
Pennsylvania, and the corporations which combine and 
control this supply have the basis for a complete 
monopoly. The same would be true of men who pos- 
sess the whole supply of diamonds or iodine or quick- 
silver or petroleum. The essence of the trust is to 
restrict the whole of the supply to a few hands, and 
the essence of protection is to restrict competition to 
the inhabitants of a limited area; and the tariff and 
the trusts, both in Germany and the United States, 
work together harmoniously, so that, in place of the 
ideal increase of supply through competition, the tariff 
gives us repression through trusts. Germany, with 
its protective tariff, has over four hundred trusts, or 
cartels. The United States, with its higher protective 
tariffs, has an equal number; but England, without 
any such restriction, has few industrial monopolies, 
since the moment the price is raised above the price 



THE TRUSTS 57 

of the like foreign product, by reason of the undeviat- 
ing laws of trade and commerce, the foreign product 
comes in and reduces the price. Wilhelm Berdrow, a 
German economist, writing in the May Forum of 1899 
upon the trusts of Europe, says: "As far as England 
is concerned, it must be admitted that, notwithstand- 
ing her great industrial activity and competitive war- 
fare, not less than that of other states, the trust sys- 
tem has as yet found but tardy acceptance in that 
country. This is doubtless due in some degree to the 
thorough appreciation of the principle of free trade; 
for it is well known that the largest trusts are power- 
less unless their interests are secured by a protective 
tariff excluding from the whole market the product 
of foreign countries." Thomas Scanlon, of Liver- 
pool, writing of trusts in that country says : "Leaving 
the region of the transport traffic and surveying the 
wide area of British industries in general, it cannot 
be said that we suffer in any appreciable degree from 
combinations of producers to keep up prices. That 
^trusts' exist in free trade countries, as well as in pro- 
tectionist countries, is undeniable, but while in the 
former the economy in production which results from 
their promotion goes to benefit the consumer in the 
shape of reduced prices, in the latter they are identi- 
fied with high prices to the consumers and large profits 
to the producers." 

The greatest and the wisest of our American pro- 



58 THE TARIFF ANEK THE TRUSTS 

tectionists have always observed the natural tendency 
of protection to bring about monopoly. In 1889 John 
Sherman said: *'The primary object of a protective 
tariff is to secure the fullest competition by individuals 
and corporations in domestic production. If such in- 
dividuals or corporations combine to advance the price 
of the domestic product and to prevent the free result 
of open and fair competition, I would, without a mo- 
ment's hesitation, reduce the duties of foreign goods 
competing with them in order to break down the com- 
bination." Mr. Blaine, in his '^Twenty Years of Con- 
gress'' says: "Protection in the perfection of its design 
does not invite competition from abroad, but is based 
on the contrary principle that competition at home 
will always prevent monopoly on the part of the capital- 
ists, assure good wages to the laboring man and de- 
fend the consumers against the evil of extortion." Mr. 
Andrew Carnegie is quoted in the American Manufac- 
turer of Pittsburg, under the date of July 25, 1884, as 
saying: ''We are the creatures of the tariff, and if ever 
the steel manufacturers here attempt to control or 
have any general understanding among them, the 
tariff would not exist one session of Congress. The 
theory of protection is that home competition will 
soon reduce the price of the product so it will yield only 
the usual profit ; any understanding among us would 
simply attempt to defeat this. There never has been 
nor ever will be such an understanding." Not only 



THE TRUSTS 59 

does such an understanding exist now between hun- 
dreds of separate manufacturers in this country, but 
there are hundreds of actual corporate monopolies, 
and such monopolies absolutely control the price of 
nearly every necessary of life. 

The worst abuses are sometimes destroyed by the 
very completeness of their triumph and for this rea- 
son let us examine the abuses of some of these trusts. 
The other day in the Federal Court at St. Paul twenty 
corporations, united in the trust known as The In- 
ternational Paper Company, which has sold practical- 
ly ninety per cent, of the paper product of the country, 
plead guilty under the Sherman Interstate Trust Law 
to the offence of restraining and monopolizing the 
trade in paper and the price in paper has materially fal- 
len. Let us examine this admitted monopoly. The 
source of our information as to this trust is the testi- 
mony of Mr. John Norris, the business manager in 
1901 of the New York Times, given before the Indus- 
trial Commission on April 12th of that year. For 
eighteen years prior to the passage of the Dingley Act 
there had been a steady downward tendency in the 
price of news print paper. This tendency came from 
the substitution of wood for rags in making pulp and 
by reason of great improvement in the machinery and 
methods of manufacture of paper. Within a period of 
seven years prior to the Dingley Act the speed of paper- 
making machines was increased from 200 to 500 feet of 



6o THE TARIFF AND THE TRUSTS 

product per minute, and the width of the paper was 
increased to 162 inches. Pulp made in adjoining mills 
was pumped in a liquid state from the pulp mill to 
the paper mill, saving a dollar a ton upon the manufac- 
ture in that one item. The conversion of water power 
into electric power and its transmission by wire also 
contributed to cheapen the cost of manufacture. The 
stimulus given to the manufacture of the paper known 
as news print resulted in an increase of capacity per 
day during the year 1896 of about 400 tons. Pulp 
wood was during that year cut from the cheap timber 
lands in Canada and imported free of duty, but there 
was a duty of 10 per cent, ad valorem on wood-pulp, 
and it amounted to about $1.20 per ton. The duty on 
news print paper was 15 per cent, or $3 per ton, but 
no news print paper was imported. This was the sit- 
uation when a committee of paper manufacturers ap- 
peared before the Ways and Means Committee on 
December 31, 1896, and urged an increase in the tariff 
on pulp and paper. This committee stated to the 
Ways and Means Committee that in case an increase 
in duties was granted to them, it would not result in 
any increase in the price of paper, and upon that 
understanding the duty on mechanically ground wood 
was increased from 10 per cent., or an average of $1.20 
per ton to $1.67 per ton, and the duty on news print 
paper costing less than two cents per pound was raised 
from 15 per cent., or $3 per ton, to 30 cents per loe 



THE TRUSTS 6 1 

pounds, or $6 per ton. Prior to that enactment no 
news print paper had been imported into the United 
States, and the government derived no revenue there- 
from, because the American mills could make paper 
more cheaply than any other mills. With the law 
practically prohibiting all foreign competition the In- 
ternational Paper Company filed articles of incorpora- 
tion in New York State on January 31, 1898. Its 
capital stock was $45,000,000 and power was given 
to issue $10,000,000 in bonds. About all the large 
paper mills of the country were merged into the 
company, producing about eighty per cent, of the 
American output. The result of this duty and this 
trust was that the newspapers had to pay $8 per ton 
more for their paper after the consolidation; and be- 
tween the time of the combination and the time when 
Mr. Norris gave his testimony before the Industrial 
Commission the trust had received an increase of 
three and one-third million dollars per annum as a 
result of the tariff and the suppression of competition. 
The increase in the cost of paper for two large news- 
papers alone was $150,000 per annum each. The 
United States Government and the Dominion of Can- 
ada in 1898 each appointed Commissioners known as 
the Joint High Commission to establish, if possible, 
reciprocal relations between our country and Canada, 
reducing as against each other existing tariffs. The 
International Paper Company appeared before this 



62 THE TARIFF AND THE TRUSTS 

Commission and opposed all changes. The Canadian 
people resented the attitude of the International 
Company, and retaliated upon American users of its 
logs, who had previously obtained their supplies with- 
out any export duty. The Province of Ontario pro- 
hibited the export of any logs cut from crown lands. 
The Province of Quebec imposed a license fee of $1.50 
per cord upon all logs cut for American use. The 
result was that the International Paper Company and 
other paper companies have been cutting off our 
forests at the rate of about 1700 square miles per 
annum. The Dominion of Canada has forests of 
spruce from the east border of Labrador to the Yukon, 
from the St. Lawrence north to Hudson Bay, and 
could easily furnish us our wood-pulp, while our own 
forests because of their devastation by paper compa- 
nies and chemical companies are becoming limited. 
Is not the preservation of our forests a matter of suffi- 
cient importance to attract the attention of statesmen? 
Shall we impose high duties upon paper, and thereby 
encourage paper companies to destroy them? The 
flow of our rivers, climatic conditions, irrigation, and 
many other considerations make it of the greatest im- 
portance that our remaining forests be preserved. 
The stock of this paper company, like the stock of 
most of this class of corporations was heavily watered. 
The promoters of such corporations do not call it 
water, they simply appraise as an asset the value of the 



THE TRUSTS 63 

privilege which our government gives the corpora- 
tion by the tariff to plunder the American people. 

The borax trust is the best example of the evils of 
tariff protection which we have in this country. 
Everything in a trust which is subject to censure is 
displayed to the best advantage by this combination, 
increased prices, restricted production, lower prices to 
foreigners than to Americans, and false and hypocrit- 
ical pleas that free borax would destroy the borax 
industry. This trust is a world trust, and it teaches 
us that a world trust cannot sell its product in Eng- 
land, where foreign competition is unrestricted, at the 
prices which it exacts from Americans. The prin- 
cipal borax deposits of the world are in California and 
Nevada, Asia Minor, Peru and Chili; but the largest 
and the most easily worked and the most productive 
mines are those in California. The McKinley Tariff 
imposed duties on borax and all boracic acids of 5 
cents per pound, the Wilson Tariff reduced the duty 
on borax to 2 cents, on boracic acid to 3 cents, and on 
borate of lime to ij4 cents. The Dingley Tariff made 
the duty on borax and boracic acid 5 cents, and in- 
creased the duties on borates. The Pacific Coast 
Borax Company owned the California and Nevada 
deposits, and, through Senator White, of California, 
and Senator Stewart, of Nevada, it procured from 
Congress in the Dingley Bill this excessive tariff ; then, 
with this duty as a large asset, it sold its property to 



64 THE TARIFF AND THE TRUSTS 

the Borax Consolidated Works, Limited, an English 
Company with a capital of $7,000,000. In September, 
1897, the British and Colonial Druggist, an English 
trade newspaper, explained the ability of the American 
producers to compete in the markets of the world by 
saying that to the natural advantages in the matter of 
deposits of pure borax was added an extremely heavy 
duty on borax, which practically barred the foreign 
product from entry into the States. It said : ''We can 
put this advantage in a startling way by saying that, 
if the American manufacturers obtained for their 
borax sold at home the present price of the article in 
this country plus the duty in America, they would be 
in a position to give away one and a half times a^ 
much borax as they sold at home and yet receive a 
return per pound on the whole higher than the present 
English price per pound.'' On October 28, 1899, the 
price of borax in London where the main office of the 
company is, was 3^^ cents per pound, as against 7^4 
cents in New York. The same company supplies 
borax from the same mines and mills to both markets 
and this disparity in prices has continued between 
England and the United States down till the present 
day. A London newspaper in 1904 said: "The Amer- 
ican duty on imported borax is 5 cents per pound. 
The home price in the United States is about 7^ cents 
per pound, and the export price is about 2}4 cents, so 
that we get the productions of borax at one-third the 



THE TRUSTS 65 

price which the people in the United States do. The 
average annual dividends of the borax trust from the 
time of its formation to 1904 were 16^ per cent." 
The borax trust is an English trust. It exploits 
Americans; but, by reason of free trade in England, 
it must sell its own people borax at its value in the 
markets of the world. Will protectionists contend 
for a moment that it is for our advantage to aid by 
protective duties such a foreign monopoly? 

The Pittsburg Plate Glass Company has a capital 
of $10,000,000. In 1899 it controlled 682 out of 946 
pots in the manufacture of glass, and it increased the 
prices of plate glass within three years 150 per cent., 
as described in the prior chapter. It had an under- 
standing in 1900 with other companies, and thus con- 
trolled the prices of plate glass. According to the 
testimony of Mr. Fred G. Elliott, the manager of 
John Lucas & Co., before the Industrial Commission 
on December 20, 1900, the Pittsburg Plate Glass 
Company sent to the firm of John Lucas & Co. a letter 
of which the following is a copy: 

Philadelphia, Pa., Oct. 2*7, 1900. 
Gentlemen : 

We have just been advised by our general office that any 
permission that has been given to the jobbers whereby they 
were allowed to import plate glass must be at once withdrawn, 
and we hereby beg to notify you to this effect. 

We will ask you to send to this office at once, a mem- 
orandum of any foreign glass which you may have ordered 
5 



66 THE TARIFF AND' THE TRUSTS 

which you have not received. Please include in this mem- 
orandum that which may already be on the water as well as 
the portion that has not yet been shipped from abroad. 
Kindly give this matter your prompt attention, and oblige 
Yours truly, 

Pittsburg Plate Glass Company. 

This letter was followed in November by another 
letter of which the following is a copy: 

Philadelphia, Pa., Nov. 30, 1900. 
Gentlemen : 

At a meeting of the manufacturers and "A" jobbers of 
plate glass in Pittsburg on the 14th instant, it was resolved 
that no "A" or "B" buyers would be permitted to import plate 
glass or to purchase plate glass that had been imported into 
this country. The manufacturers will expect all the "A" and 
'*B" buyers to conform strictly to this resolution. 
Yours truly, 

Pittsburg Plate Glass Company. 

Was ever a people in the world brought into bondage 
under such petty industrial tyrants as these? This 
kind of tyranny has been carried quite far enough. 
No retail druggist can obtain goods from a wholesale 
druggist or manufacturer of a proprietary medicine 
unless such retail druggist becomes a member of the 
National Association of Retail Druggists and agrees 
to observe the established prices at which drugs and 
proprietary medicines shall be sold to the consumer, 
and if he fails to obey, he is immediately placed upon 
the list of what is known as "aggressive cutters," and 
thenceforth is unable to purchase from the manufac- 
turer. The Tobacco Trust, the Diamond Match 



THE TRUSTS 6*J 

Company, the National Biscuit Company, the Sugar 
Trust, the Watch Trust, and the collar, cuff and shirt 
makers are all reputed as saying to their customers: 
*'Buy of us, and only of us, if you wish to continue 
to do business." Many of them allow reductions in 
case such conduct is pursued, and prescribe the ter- 
ritory in which the dependent manufacturer can sell 
his goods. In 1903 the Canadian Manufacturers' 
Association and the American Manufacturers' Asso- 
ciation, according to Mr. Wade, a member of the 
Canadian Parliament, had gotten together and fixed 
the prices to be charged throughout Canada. Mr. 
Wade said, in a speech before the Canadian Parlia- 
ment: "Let me illustrate what I mean. I will take 
"one class of manufacturers, and I will show how they 
"deal with the country. I have under my hands some 
"papers. I will take hardware for instance, cut nails, 
"wire nails, tarred paper, pressed spikes, tacks, lantern 
"ropes, lead pipes, shot, bolts, and nuts, tile bolts, 
"screens, carriage bolts, bolt ends, varnishes, shovels, 
"coach screws, wire of all sorts, nuts, axes, wooden- 
"ware, wire doors, wire screens, coal hods, stove-pipes, 
"elbows, locks and knobs, white lead and putty. 
"There is an association of these gentlemen and I 
"mean to say to this House that no wholesale dealer 
"in Canada can buy a dollar's worth of any of these 
"articles from any one of the members of this Asso- 
"ciation until he enters into a binding agreement that 



68 THE TARIFF AND THE TRUSTS 

*'he will not purchase from any other parties outside 
"'the association, that he will not sell for a less price 
"'than that dictated; and then they will not really sell 
''him the goods but allow him a return commission for 
''selling them. They dictate the price at which he shall 
"sell them and compel him to buy from them, and after 
"that they require him at stated periods each year, or 
"each six months or each month, to m.ake a statutory 
"declaration that he has performed all these conditions. 
"Let me read to the House an extract I have, an ex- 
"tract from a contract that they require the dealer to 
"enter into. This is the statement of the shot men, 
"and I will refer the honorable gentlemen to the well- 
"known firm in Toronto of Jenkins & Harding, who 
"are the agents for a number of these concerns : 

SHOT 

January 8, 1903. 
Dear Sirs: 

We beg to advise you that, subject to the following con- 
ditions, you may be entitled to a premium of 2^ per cent, 
upon the net amount of your purchases of shot (commencing 
to-day) in each six months ending June 30 and December 
31, same to be payable within 30 days after the expiration of 
each six months upon which premium applies. Conditions : 
that we receive from you, after the end of each six-months' 
period ending June 30 or December 31, a declaration which 
satisfies us that in the six months upon which you are ap- 
plying for premium you have not imported or purchased 
shot from any manufacturer other than those whose names 
appear below, and that you have not directly or indirectly 
offered or sold shot at less than established prices of the 
Shot Association of Canada to the retail trade, or upon more 



THE TRUSTS 69 

favorable terms to your customers than the established terms 
of the said Association to the retail trade. We reserve the 
right to revoke and cancel all or part of this proposition at 
any time on notice to you by registered letter of our desire 
and intention to do so, but not thereby to relieve ourselves 
of any obligations which may have accrued on your above 
described purchases of shot up to date of said revocation." 

Mr. Wade continues: ''I will state further that I 
"have been informed, and believe, that the prices which 
"are fixed by the Canadian manufacturers to-day 
"throughout Canada for all hardware are prices which 
"are agreed upon by them in conjunction with the 
"American Manufacturers' Association. Not very 
"long ago I chanced to hear a conversation which was 
"taking place between a strong supporter of the Con- 
"servative party, a wholesale merchant, and another 
"gentleman, and he made this statement : 'It is no use 
"for us to talk about it, we in the wholesale trade are 
"absolutely at the mercy of the manufacturers o£ 
"Canada, and they are in affiliation with the manufac- 
"turers of the United States.' " Now the explanation 
of the whole matter is this: before 1890 we exported 
and sold to Canadians, and have ever since continued 
selling, the articles in hardware enumerated by Mr. 
Wade, being able to undersell the manufacturers of 
like articles in England. Mr. Blaine, in an article up- 
on the subject in the North American Review for Jan- 
uary, 1890, enumerated many of these very articles as 
having been exported for a considerable period of 



70 THE TARIFF AND THE TRUSTS 

time to Canada by our hardware men and there sold 
in competition with Enghsh hardware, and he added 
that we could manufacture these articles in hardware 
cheaper than the English could, and that we could 
pay the same duty that England paid and undersell 
her in Canadian markets. Our exporters of hardware, 
however, do not wish articles sold by the Canadian 
jobbers and retailers so near home to be cheaper than 
they are sold in our market, so they have entered in- 
to an agreement with the Canadian Association requir- 
ing them to keep up the price lest the cheaper prices in 
Canada may be used as an argument to do away with 
the duties on the hundreds of articles of hardware 
protected in the Dingley Bill. Many a competitor is 
in a position to beat the trust in a contest of cut-throat 
competition if only the trust were compelled to make 
its prices uniform to all customers, but with its ample 
funds it will seek out the independent competitor in 
one locality and another, and by reducing its prices 
there will drive him out of the business. Our trusts 
even coerce the national government into purchasing 
from them at higher prices than it can purchase the 
same material in European markets. The Isthmian 
Canal Commission recently purchased 20,000 barrels 
of English cement at a saving of 2i7 cents a barrel on 
the price demanded by the American manufacturers; 
but when Secretary Taft appeared before the Senate 
Committee on Finance and urged that Congress give 



THE TRUSTS ^\ 

the Panama Canal Commission authority to purchase 
two steel dredges in the foreign market in Scotland 
for $654,000, instead of accepting the American bid 
for the same kind and quality of dredges at $724,000, 
the Senate Finance Committee refused, and finally 
Congress directed that the materials to be used in the 
canal should be purchased from American manu- 
facturers, unless the President determined that the 
prices fixed were excessive. So the taxpayers must 
pay the bill for the purpose of continuing the prosper- 
ity of these monstrous trusts. 

The evils of our protective tariffs have been greatly 
mitigated by the fact that under the Constitution of 
the United States we have absolute free trade between 
fifty states and territories, an area covering upwards 
of three and a half million square miles ; but when the 
trust is established the very largeness of our country 
results in the largeness and success of the trust. So 
vast a field secured to them from outside competition 
is tempting enough to invoke the energies of immense 
capital for its exploitation, and as a result gigantic 
trusts protected by the tariff come into existence with 
a power for evil in trade and politics which would be 
impossible in a small country, however high might be 
the tariff sheltering them from competition. Under 
no conditions of high tariff in any other country in 
the world could you get such a vast trust as the United 
States Steel Corporation, because there is no other 



'J2 THE TARIFF AND THE TRUSTS 

country with such a large body of consumers able to 
pay high prices for products. There has not been a 
trust dependent upon the tariff formed within the last 
ten years which has not capitalized its right to plunder 
and to continue to plunder the American people, and 
as a rule that privilege has been counted as equivalent 
to all the other assets of the company. The United 
States Steel Corporation is our best illustration of 
this kind of gigantic trust. It is capitalized at $1,404,- 
000,000. Its alleged capital is 1-67 of the total wealth 
of the United States in 1900 and it produced i-io of 
its entire manufactures in that year. If its stocks and 
bonds had been issued in the shape of $90 shares, it is 
said that there would have been one for each family 
in the United States, or if their face value was divided 
among the people, there would have been at the time 
of its formation about $18 for each man, woman and 
child in the United States, or about 90 cents for each 
man, woman and child on the face of the earth. The 
different corporations associated together control over 
213 different manufacturing and transportation plants 
and companies, 41 different mines located in 18 differ- 
ent states, and upwards of 100 large steamers upon 
the lake, those recently built being 600 feet boats and 
handling between 13,000 and 14,000 tons of ore. It 
owns the largest deposits of iron ore, limestone and 
coke in the world. It is closely allied with a large 
number of other corporations and with railways, and 



THE TRUSTS , 73 

it is of such vast power and wealth that it cannot well 
be compared with any other in the world. In 1899 
Mr. Charles M. Schwab, who became the first presi- 
dent of the company, wrote a letter to Henry C. Frick, 
in which he stated that steel rails could be made for 
less than $12 a ton, whilst the cost to produce them in 
England was $19 a ton, and that like differences ex- 
isted in the cost as to other steel products. Yet this 
gigantic corporation is now and for several years past 
has been selling its steel rails to our railroads for $28 
per ton, and exporting them all over the world for 
about $20 to %22 per ton. At the present time it has 
an understanding with the makers of rails in Germany 
and England not to sell in their home markets below 
certain prices and to sustain the prices of rails in neu- 
tral markets; but it is exporting its steel billets and 
blooms, its steel plates and bridges, its barb wire, wire 
nails and tin plate, its tubes and pipes to every part 
of the world and selling them at prices greatly re- 
duced from the home price. Before the Chamberlain 
Commission, which during the years 1903 and 1904 
was engaged in taking testimony as to the conditions 
of trade in England, witness after witness appeared 
and testified as to the prices of these products of the 
United States Steel Association sold to Englishmen, 
and it appeared from this testimony that invariably 
they were sold for from twenty-five per cent, to forty 
per cent, below the price for which they were sold to 



74 THE TARIFF AND THE TRUSTS 

the American people. Evidence to the same effect has 
been presented in the Senate by Sen. Bacon, and finally 
the fact has been admitted by Congressman Dalzell, of 
Pennsylvania, in the House of Representatives. 

Hundreds of other trusts, not so vast as the steel 
trust, but just as oppressive in their extortions, have 
been formed to avail themselves of the tariff. The 
following are good examples of trusts fostered by the 
tariff : 

The Meat Trust, a combination of the National 
Packing Company, Armour & Company, Swift & 
Company, John P. Squire & Company, Schwarzschild 
& Sulzberger Company, St. Louis Dressed Beef and 
Provision Company, Northern Packing & Provision 
Company, Libby, McNeil & Libby, protected by 2 cents 
a pound on beef and pork and 5 cents a pound on 
bacon and ham, practically controlling the whole 
market and fixing the price on the domestic product 
at a price equal to that of i860, when butchers 
slaughtered animals by hand and availed themselves 
in no way of the by-products. This trust is also pro- 
tected on most of its by-products. 

The Standard Oil Company controlling 20 different 
companies, with an authorized capitalization of $102,- 
000,000, protected on many of its by-products by heavy 
duties, and by rebates on its imported tin cans of 
ninety-nine per cent, of the duty.* 

♦Both the Standard Oil Company and the Anthracite Coal 



THE TRUSTS 75 

The American Linseed Company, combining 47 
different companies, with an authorized capital stock 
of $50,000,000, representing eighty-five per cent, of 
the Hnseed oil production of the United States, and 
under the domination of the Standard Oil Company. 

The National Lead Company with an authorized 
capital stock of $30,000,000, comprising 26 plants, and 
under the domination of the Standard Oil Company. 

The United Lead Company, combining 19 different 
companies, and also under the domination of the 
Standard Oil Company. 

The American Sugar Refining Company, control- 
ling 55 different companies, representing from seventy 
to ninety per cent, of the product, with a total capital 

Combination have procured import duties on oil and anthracite 
coal in a manner not generally known. Hidden away in the free 
list of the Dingley Bill is the provision that petroleum should be 
admitted free of duty provided **Thct if there be imported into 
the United States crud2 petroleum, or the products of crude pe- 
troleum produced in any country which imposes a duty on 
petroleum or its products exported from the United States, there 
shall in such cases be levied, paid, and collected, a duty upon 
said crude petroleum or its products so imported equal to the 
duty imposed by such country." 

The Russian duty on imports of petroleum is from 150 
per cent, to 250 per cent, and Russia is the only country which 
can export petroleum to this country. So that for all practical 
purposes the Standard Oil Company is protected from foreign 
competition by a duty of 150 to 200 per cent. 

The provision as to duty on coal, paragraph 415 of the Ding- 
ley Bill, is as follows : **Coal bituminous and all coal contain- 
ing less than 92 per cent, of fixed carbon and shale, d^ cents per 
ton of 28 bushels, 80 pounds to the bushel" ; but the Welsh an- 
thracite coal, which alone would come into competition with the 
anthracite coal of the coal combination, contains less than 92 
per cent, of fixed carbon. So that both bituminous and anthra- 
cite coal are protected to the amount of (i^ cents per ton. 



jd THE TARIFF AND THE TRUSTS 

issued of the parent and affiliated companies of $145,- 
000,000. 

The International Harvester Company, controlling 
6 plants, with an authorized capitalization of $120,000,- 
000, 'Controlling seventy per cent, of the industry. 

The American Brass Company, with an authorized 
capitalization of $20,000,000 and controlling 9 plants. 

The American Thread Company, with an authorized 
capitalization of $12,000,000, owning or controlling 13 
different plants, controlling fifty per cent, of the in- 
dustry. 

The Casein Company of America, known as the 
Milk Sugar Trust, with a total capital issued of $6,- 
492,000, owning 5 different plants and controlling 
seventy per cent, of the industry. 

The Chicago Pneumatic Tool Company, with a 
capitalization of about $8,000,000, owning 7 plants 
and controlling eighty per cent, of the industry. 

The Central Foundry Company, known as the Soil 
Pipe Trust, with a capitalization of $14,000,000, own- 
ing 13 plants and controlling eighty per cent, of the 
industry. 

The Diamond Match Company, with an authorized 
capital stock of $15,000,000, owning 18 plants and 
controlling eighty-five per cent, of the industry. 

The International Steam Pump Company, known as 
The Steam Pump Trust, with an authorized capital of 
$25,000,000, owning 8 plants and controlling eighty 



THE TRUSTS "J^J 

per cent, of the product. 

The General Chemical Company, with an authorized 
capital of $25,000,000, controlling seventy per cent, 
of the trade and 24 chemical plants. 

The American Woolen Company, with a capital of 
$25,000,000 preferred stock and $40,000,000 common 
stock, having about 30 plants and controlling upwards 
of sixty per cent, of the sales. 

The California Fruit Canners' Association, with a 
capital stock of about $3,500,000, including 18 different 
fruit companies, and controlling sixty-five per cent, 
of the trade. 

The Glucose Trust, controlling 5 companies, with 
20 plants, including the National Starch Company and 
the Illinois Sugar Refining Company, having an 
authorized capital stock of $30,000,000 preferred and 
$50,000,000 common stock and controlling a large part 
of the sales in the United States. 

The Candy Trust, with a capital stock of $9,000,000, 
including 16 different plants, and controlling over 
fifty-five per cent, of the sales of candy. 

The National Enameling and Stamping Company, 
having a capital stock of $30,000,000 and controlling 
13 plants and fifty-five per cent, of the industry. 

The Glassware Trust, with an authorized capital 
stock of about $5,500,000, having 19 plants and con- 
trolling about seventy per cent, of the sale of glass- 
ware. 



y8 THE TARIFF AND THE TRUSTS 

The Rubber Goods Manufacturing Company, hav- 
ing a capital stock of $50,000,000 and 17 plants and 
controlling about sixty per cent, of the sales. 

The United Button Company, having a capital stock 
of $3,000,000 and controlling 3 plants. 

The Aeolian Weber Piano and Pianola Company, 
having a capital stock of $10,000,000 and owning 12 
plants. 

The AUis-Chalmers Company, known as The 
Machinery Trust, having a capital stock of about $36,- 
250,000, controlling 4 large plants and fifty per cent, 
of the trade. 

The American Agricultural Chemical Company, 
known as the Fertilizer Trust, having a capital stock 
of about $35,000,000 and 40 fertilizer plants. 

The American Can Company, known as the Tin Can 
Trust, being closely allied with the American Tin 
Plate Company, and having a capital of $88,000,000 
and 123 plants and controlling about seventy-five per 
cent, of the trade. 

The American Cement Company, known as the 
Cement Trust, having a capital of about $2,000,000 
and controlling 6 plants. 

The American Cotton Oil Company, known as the 
Cotton Oil Trust, having a capital stock of about 
$33,000,000 and 30 plants and controlling about sixty- 
five per cent, of the industry. 

The American Felt Company, known as the Felt 



THE TRUSTS 79 

Trust, having a capital of about $4,000,000 and 5 plants 
and controlling about sixty per cent, of the industry. 

The American Glue Company, having a capital 
stock of about $3,000,000 and 9 plants and controlling 
fifty-five per cent, of the industry. 

The American Hide and Leather Company, having 
a capital stock of about $32,000,000 and 22 plants and 
controlling about sixty per cent, of the industry. 

The American Radiator Company, having an 
authorized capital stock of about $10,000,000 and 12 
plants and controlling eighty per cent, of the industry. 

The American Seeding Machine Company, known 
as The Seeding Machine Trust, having an authorized 
capital of $15,000,000 and 6 plants and controlling 
ninety per cent, of the trade. 

The American Sewer Pipe Company, having an 
authorized capital of $8,000,000 and controlling from 
forty per cent, to fifty per cent, of the industry. 

But without extending this list, it is safe to say that 
there are but few large industries in our country which 
are not protected by customs duties and which have 
not formed themselves into trusts for the purpose of 
destroying home competition and thereby raising the 
price of the commodities which they manufacture up 
to the duty line. Does this vast organized wealth 
need protection ? It does not need it, but it commands 
it. All these trusts give the usual reasons for their 
formation — ^the lessening cost of manufacture, the 



8o THE TARIFF AND THE TRUSTS 

saving of commercial agents, the division of territory 
between their plants, and the reduction of the price to 
their custom-ers. But every one of them when it had 
established its control of the market not only kept the 
whole of the savings of the consolidation to itself, but 
took from the public considerable besides, making the 
selling prices much higher than they would have been 
under full competition. We Americans boast of our 
freedom, and yet in that particular branch of life which 
touches the most people, the right to buy and sell, we 
have been throttled by the trusts as no other people in 
the world have ever been throttled. If our industrial 
freedom is taken away, how long will any other right 
or liberty be respected? We look with pity upon the 
downtrodden nations of Europe, oppressed by royal 
tyrants and privileged aristocrats, but where in all the 
world can you find such gigantic combinations formed 
for the purpose of suppressing competition and fixing 
artificial prices as exist to-day in this country? The 
present generation of Europeans, to a considerable 
extent has inherited its industrial restrictions from 
conditions existing in the eighteenth century; but we 
can proudly boast that we are a self-made people and 
have ourselves forged the fetters that bind us, and that 
we have forged them so strong that it will be doubtful 
whether we can ever break them. I am not exagger- 
ating when I say that there are a large number of peo- 
ple in this country who have such an admiration for big 



THE TRUSTS 8l 

things that they admire, for its size, the very trust that 
robs them daily, and will consent to be fleeced if it 
only be done by some institution which is big. The 
newspapers in glaring headlines daily tell us of the 
life of the trust magnate, and a million simple-minded 
folk read it with delight. They talk with each other 
about the daily and hourly income of Mr. Rockefeller 
or Mr. Carnegie, and they are proud of these abnormal 
growths of our American life. 

The conditions which I have been describing seem 
to me to lead directly to state socialism. The trust 
is in and of itself a species of socialism. It starts in 
by excluding foreign competition, passes on to the ex- 
clusion of home competition, and ends with charging 
consumers as much as the tariff will allow. This re- 
sults in taking men's property without their consent 
and without adequate compensation, and that is social- 
ism. The only difference between the owners of the 
trust and the socialist is this : the owners of the trust 
procure a law allowing partial plunder of their fellow- 
citizens, while the socialist proposes to procure a law 
allowing the taking of all private property without 
compensation and the turning of it over to the state 
to be controlled for the common benefit. This Is not 
partial plunder; it is universal legalized plunder; but 
when any body of citizens so powerful and so influen- 
tial as the men who procure tariff laws have started 
out upon a course of legalized plunder, they cannot 



82 THE TARIFF AND THE TRUSTS 

well stop. Plunder begets plunder, and they who 
commence with partial plunder will end with universal 
plunder. You cannot jump half-way down Niagara. 
When the state farms out to vast corporations a part 
of its power to tax the people, it is well on its way 
toward socialism. A partnership between trusts and 
government to seize for the advantage of the trusts 
the property of other men and to use the law and 
powers of government to that end is practically social- 
ism. There is no argument in favor of the existence 
of these combinations to crush competition, to limit 
production, and to control prices, which cannot logical- 
ly and consistently be turned by the socialist to support 
his doctrine. The socialist argues that if the United 
States Steel Company can conduct a business one- 
tenth in amount of the industries of the country suc- 
cessfully, that the state can also conduct it successi- 
fully. If the avoidance of waste resulting from com- 
petition is to outweigh all considerations of personal 
liberty and individual initiative, then the more perfect- 
ly our industries are organized into a great industrial 
machine the better. The socialists perceive this, and 
therefore they do not attack the trusts. The social- 
ists desire a general absorption of production by the 
state, and when a few corporations have successfully 
absorbed and controlled production, they say that the 
fruit should not go into the hands of a few men, but 
should go into the hands of the state to be distributed 



THE TRUSTS 83 

to labor as the true source of capital. Jean Jaures, 
the leader of French Socialism in his recent work, 
"Studies in SociaHsm/' says: "And if capital were 
organized, if, by means of vast trusts, it were able to 
regulate production, it would only regulate it for its 
own profit. It would abuse the power gained by 
union to impose usurious prices on the community of 
buyers, and the working class would escape from 
economic disorder only to fall under the yoke of 
monopoly."" When the state intervenes in behalf of a 
comparatively few men and provides by law that these 
shall be permitted to exact from the millions of con- 
sumers a price increased by excessive duties, has it not 
already taken effective control of production, and can 
government under such circumstances avoid the 
socialists' contention that such a condition is socialism 
without any benefit to the people ? Again, this leader 
of socialism says: "To the incomplete, narrow and 
chaotic organization of wealth attempted by capital it 
[socialism] has opposed a magnificent conception of 
harmonized wealth, where the effort of each would 
be supplemented by the co-ordinated effort of all." 
His idea is that, instead of the State's aiding a few 
hundred manufacturers to organize production into 
many separate, "narrow, and incomplete" combina- 
tions of capital for their own selfish benefit, subject- 
ing business to great fluctuations in value, that it 
should carry out the "magnificent conception of har- 



84 THE TARIFF AND THE TRUSTS 

monized wealth" by becoming both owner and trustee 
for the people of production. A fine theory this, but 
the most dangerous to a free people ever promulgated 
by mortal man. 

Again, is it not productive of socialism that a few 
men have gathered to themselves a considerable part 
of labor-saving machinery largely for their own profit 
when these inventions have resulted from the progress 
of science and ought to improve equally the condition 
of all men? The law has protected these vast cor- 
porations, first in their infancy, and then in their 
power, till they bid us defiance and shape legislation 
to their wishes. When the citizen is excluded from 
taking part in one or another form of production, to 
that extent he loses a portion of the rights which are 
secured to him in a democratic form of government. 
While the business of the country was conducted by 
persons or firms, the skilled employee held close and 
sympathetic relations with his employer. He was 
something more than a mere machine. He felt the 
stimulus and ambition which goes with equality of 
opportunity. Under the trust the employee becomes 
part of a vast industrial army with no hopes and no 
aspirations, a daily task to perform, and no such per- 
sonal interest in the success of his work as when he 
was in close contact with his employer. The effect of 
this change, together with the arbitrary methods of 
the trusts, has been to unite the laboring men, in 



THE TRUSTS 85 

imitation of the trusts, into huge trades unions under 
the leadership of a few men. Is not a condition which 
brings about an array of producers strongly organized 
into trusts on the one side and the millions of laboring 
men arrayed in labor unions, under leaders who are 
not always scrupulous, on the other, a condition pro- 
ductive of evil? The extortions of the trust are the 
opportunity of the socialist. Men can bear poverty, 
but not poverty which they believe the result of in- 
justice. The trust managers cannot extort the pen- 
nies from the millions to add to their millions and still 
continue to escape stirring up such bitterness among 
the masses of the people that they are easily beguiled 
by dangerous fallacies regarding governrru^.nt. Our 
socialists in the main come to us from highly pro- 
tected Germany, where 400 cartels, or trusts, export 
their goods and sell them in other countries at lower 
prices than to their own people. As a result of such 
conduct the socialist vote has doubled within ten 
years, and at the last election they cast 3,000,000 votes. 
The countries in which socialism best thrives are 
those where industries are most highly protected ; and 
in England where free trade prevails, socialism has 
not obtained a strong foothold. 

Many evidences of socialistic tendencies exist in 
this country. Why have we been steadily rejecting in 
recent years the idea of self-help and looking to organ- 
ization, association, and legislation for all help to the 



86 



THE TARIFF AND THE TRUSTS 



individual ? What means it that so many social ques- 
tions to-day are being resolved by the legislature? 
Why are we attempting to cure the drink evil and 
social evils, and all other kind of evils, by legislation? 
The statute law to-day is regarded by the American 
people as a sovereign specific for every evil. Why 
are so many men looking to the state as a universal 
employer? Why are men's faces all turned to the 
Legislature to regulate labor, grant pensions, and 
stimulate industry? Why are laws volleyed forth like 
shot from a Gatling gun in every Legislature in the 
country to protect special interests and make people 
rich and happy? Government, in the eyes of the 
greater part of the American people to-day, is simply 
a sort of a mysterious power possessed of an inex- 
haustible fund of wealth, able to do all manner of 
things for the benefit of the people, and the demagogues 
thrive upon this false theory of government as pigs 
fatten upon corn. The ideas of the American people 
have changed radically in the last twenty years. We 
are coming to look upon the President of the United 
States as a kindly monarch whose sole authority as- 
sures the general felicity. We were once jealous of 
usurpation of power, yet we sit serenely and see the 
Senate of the United States usurp the power of the 
people's forum, the House of Representatives. Are 
not all these evidences that individual initiative, in- 
dependence, self-reliance, and manhood among our 



THE TRUSTS 87 

citizens are giving way to the idea that in some way we 
are unable to control our actions and shape our own 
lives, and that we must depend for guidance upon 
government, leaders, and laws, a socialistic state? 

English-speaking people in the past have been es- 
sentially individualists. English Government in legal 
and social organization is deeply particularistic and 
not communistic. Our habit of individual initiative 
and of personal responsibility is a part of our birth- 
right. With us, according to English traditions and 
English law, the individual man is the germ of the 
state. He is to the state what the red corpuscles of 
the blood are to the human being, giving life to the 
whole body. For the preservation of the individual 
man we have ever deemed it necessary to maintain be- 
tween men a fair degree of equality in social standing 
and wealth, but the trust comes in and creates vast 
fortunes and social inequalities. Our American idea 
contemplates that no industrial power shall weigh 
heavily in the balance against government, but the 
trusts come in and even compel government itself to 
buy materials for the building of the Panama Canal. 
It is of the highest importance in sound economy that 
small and local industries should not find themselves 
at a disadvantage in attempting to compete with great 
combinations ; but the trust comes in and wages a war 
of indiscriminate suppression of all small industries. 
It is of the highest importance to cultivate in our 



88 THE TARIFF AND THE TRUSTS 

citizens the habit of individual initiative by endowing 
them with ownership of property and control of busi- 
ness; but the trust comes in and displaces thousands 
of independent owners of business and takes their place 
with its huge and oppressive machinery. Government 
must secure justice to the individual citizen, or our 
form of government will lose to him its value and its 
charm ; but the trust steps in with a law allowing it to 
practically tax the citizen for its own private advan- 
tage. We cannot live as a nation if corruption con- 
trols the sources of legislative action; but the trust 
comes in and makes jobbers and chaffers of many of 
our legislators. And now, my reader, do you have 
any doubt that the creation of such a combined and 
compacted body of trusts endowed with special priv- 
ileges as have been described in this chapter is a con- 
stant menace to the continuance of our free institu- 
tions ? Do you believe that we can preserve liberty to 
the citizen alongside of such political corruption and 
such industrial slavery? 



CHAPTER III 

AMERICAN AND ENGLISH SHIPPING 

Although we are the wealthiest country in the 
world, the greatest producers of iron and steel, and the 
greatest producers of coal, possessors of a sea coast 
of thousands of miles, with great bays and gulfs ex- 
tending into the interior, and with every condition 
which ought to make us great shipbuilders and car- 
riers, our merchant marine for the last fifty years has, 
in comparison with other countries, been little known 
upon the ocean. The reasons for this are : 

First. Our barbarous navigation laws. 

Second. The increased cost of iron, steel, and other 
materials used in building ships because of the tarifif. 

Third. The impairment of our commerce with 
other countries by reason of protective tariffs shutting 
out imports, and thereby shutting in exports. 

How many of my readers know that there is in the 
statutes of the United States to-day a law handed 
down with few changes from the eighteenth century 
prohibiting the American registry of any ship built in 
a foreign country? This relic of the legislation of a 
century ago comes to us like the bones of some mam- 



90 THE TARIFF AND THE TRUSTS 

moth of antediluvian days, and its continuance means 
that whenever we enact a statute which operates favor- 
ably to the interests of a few men or a single large 
corporation, notwithstanding its evil effects upon the 
people, it is practically impossible to repeal it. Private 
interests are so powerful and public interests are so 
weak that the following statutes have remained with 
little change since the administration of President 
Washington : 

Sec. 4131. Vessels registered pursuant to law and no 
others, except such as shall be duly qualified according to 
law for carrying on the coasting or fishing trade, shall be 
deemed vessels of the United States, and entitled to the 
benefits and privileges appertaining to such vessels : but no 
such vessel shall enjoy such benefits and privileges longer 
than it shall continue to be wholly owned by a citizen or 
citizens of the United States or a corporation created under 
the laws of any of the States thereof, and be commanded by 
a citizen of the United States. x\nd all the officers of vessels 
of the United States who shall have charge of a watch, in- 
cluding pilots, shall in all cases be citizens of the United 
States. The word ^'officers" shall include the chief engineer 
and each assistant engineer in charge of a watch on vessels 
propelled wholly or in part by steam ; and after the first day 
of January, eighteen hundred and ninety-seven, no person 
shall be qualified to hold a license as a commander or watch 
officer of a merchant vessel of the United States who is not 
a native-born citizen, or whose naturalization as a citizen 
shall not have been fully completed. 

Sec. 4132. Vessels built within the United States, and 
belonging wholly to citizens thereof, and vessels which may 
be captured in war by citizens of the United States, and 
lawfully condemned as prize, or which may be adjudged to 
be forfeited for a breach of the laws of the United States, 
being wholly owned by citizens, and no others, may be regis- 
tered as directed in this Title. 



AMERICAN AND ENGLISH SHIPPING QI 

Sec. 4135. No vessel which has been recorded or regis- 
tered as an American vessel of the United States, pursuant 
to law, and which was licensed or otherwise authorized to 
sail under a foreign flag, and to have the protection of any 
foreign government during the existence of the rebellion, 
shall be deemed or registered as a vessel of the United 
States or shall have the rights and privileges of vessels of 
the United States, except under provisions of law especially 
authorizing such registry. 

Sec. 4136. The Secretary of the Treasury may issue a 
register or enrollment for any vessel built in a foreign coun- 
try, whenever such vessel shall be wrecked in the United 
States, and shall be purchased and repaired by a citizen of 
the United States, if it shall be proved to the satisfaction of 
the Secretary that the repairs put upon such vessel are equal 
to three-fourths of the cost of the vessel when so repaired. 

Sec. 4142. In order to the registry of any vessel, an oath 
shall be taken and subscribed by the owner, or by one of 
the owners thereof, before the officer authorized to make 
such registry, declaring, according to the best of the knowl- 
edge and belief of the person so swearing, the name of such 
vessel, her burden, the place where she was built, if built 
within the United States, and the year in which she was 
built; or that she has been captured in war, specifying the 
time, by a citizen of the United States and lawfully con- 
demned as prize, producing a copy of the sentence of con- 
demnation, authenticated in the usual forms; or that she 
has been adjudged to be forfeited for a breach of the laws 
of the United States, producing a like copy of the adjudica- 
tion of forfeiture; and declaring his name and place of 
abode, and if he be the sole owner of the vessel, that such 
is the case; or if there be another owner, that there is such 
other owner, specifying his name and place of abode, and 
that he is a citizen of the United States, and specifying the 
proportion belonging to each owner; and where an owner 
resides in a foreign country, in the capacity of a consul of 
the United States, or as an agent for and a partner in a 
house or co-partnership consisting of citizens of the United 
States, actually carrying on trade within the United States, 



92 THE TARIFF AND THE TRUSTS 

that such is the case, that the person so swearing is a citizen 
of the United States, and that there is no subject or citizen 
of any foreign prince or state, directly or indirectly, by way 
of trust, confidence, or otherwise, interested in such vessel, 
or in the profits or issues thereof; and that the master 
thereof is a citizen, naming the master, and stating the means 
whereby or manner in which he is a citizen. 

Sec. 4165. A vessel registered pursuant to law, which by 
sale has become the property of a foreigner, shall be entitled 
to a new register upon afterwards becoming American 
property, unless it has been enlarged or undergone change in 
build outside of the United States. 

Sec. 4330. No license or enrollment and license, nor re- 
newal of either, shall hereafter be issued to any vessel until 
the collector to whom application is made for the same is 
satisfied, from the oath of the owner or master, that all 
equipments and repairs made in a foreign port within the 
year immediately preceding such application have been duly 
accounted for, and the duties accruing thereon duly paid: 
and if such owner or master shall refuse to take such oath, 
or take it falsely, the vessel shall be seized and forfeited. 

Act May 10, 1892. 

An Act to Encourage American Shipbuilding. {2"] Stat. 
27). Registry of foreign-built vessels owned in part by 
citizens ; conditions. 

Be it enacted, &c.. That the Secretary of the Treasury is 
hereby authorized and directed to grant registers, as vessels 
of the United States, to such foreign-built steamships now 
engaged in freight and passenger business, and sailing in an 
established line from a port in the United States, as are of a 
tonnage of not less than eight thousand tons, and capable of 
a speed of not less than twenty knots per hour, according 
to the existing method of Government test for speed, of 
which not less than ninety per centum of the shares of the 
capital of the foreign corporation or association owning the 
same was owned January first, eighteen hundred and ninety, 
and has continued to be owned until the passage of this act 
by citizens of the United States, including as such citizens cor- 



AMERICAN AND ENGLISH SHIPPING 93 

porations created under the laws of any of the States thereof, 
upon the American owners of such majority interest obtain- 
ing a full and complete transfer and title to such steamships 
from the foreign corporations owning the same : Provided, 
That such American owners shall, subsequent to the date of 
this law, have built, or have contracted to build, in American 
shipyards, steamships of an aggregate tonnage of not less in 
amount than that of the steamships so admitted to registry. 
Each steamship so built or contracted for to be of a tonnage 
of not less than seven thousand tons. 

These statutes, amended only by the Statute of 1892, 
have survived the wreck of time, the wreck of our 
merchant marine, and still remain as a striking evi- 
dence of the incapacity of the American Congress. 
Similar statutes existed in the eighteenth century in 
most European countries; but, while they have re- 
pealed the provisions as to registering foreign ships, we 
have allowed it to continue except as modified by the 
last section above. A foreigner may invest in any 
industry in this country, but if he has an interest to 
the amount of one dollar in a ship, it cannot be regis- 
tered here. We can buy a locomotive or any other 
kind of merchandise in Europe if we are willing to pay 
the duty, but no American can buy a ship and sail it 
under our flag. The result is that our citizens are 
buying of British owners '^tramp'' ships and sailing 
them under the English flag. This barbarous law is 
kept upon the statute-book largely for the benefit of 
William Cramp & Sons, of Philadelphia, the largest 
shipbuilding firm in the country, Mr. C. H. Cramp, 



94 THE TARIFF AND THE TRUSTS 

the head of that firm, testified before the Industrial 
Commission as follows: "There is money now in run- 
ning ships, and there are a lot of Americans who are 
buying the worst kind of ships — British 'bum' ships 
(I use that word because the word 'tramp' is not 
strong enough), the worst ships the English have got 
to sell. They are bought by Americans, and these 
people are now denouncing the Subsidy Bill because 
these 'bum' ships of theirs don't get much of it." 

Q. That is the case of American money being in- 
vested under the British flag not having a majority of 
the stock? 

A. Well, many are buying ships already built, the 
^'tail-enders." The ships that are being built to-day 
abroad are vastly larger than those built a few years 
ago. There has been tremendous augmentation in the 
dimensions of ships. The consequence is that British 
ship-owners who own thirty, forty, fifty or one hun- 
dred are selling off the "tail-enders" and adding large 
ships to the top. Now, these ships on the "tail-end" 
are sold off at bargains. There are a great many 
American bargain-hunters, and a great many are doing 
that thing now. 

Q. These ships are not admitted to United States 
registry are they ? 

A. No; but they expect if they kill the Subsidy 
Bill, they will get them in somehow. They think by 
the destruction of everything in sight American they 
v/ill come out on top ultimately. 



AMERICAN AND ENGLISH SHIPPING 95 

If the following history does not show that about 
everything American in shipbuilding has been destroyed 
by legislation for the benefit of such men as Mr. 
Cramp, then facts have no value. These moss-grown 
navigation acts come from a time when piracy was al- 
most a recognized trade, and if, through piracy, an 
American had captured a foreign ship, he probably 
could have procured its registry under these laws. 
But if to-day an American citizen attempts to exercise 
the natural right of a free man to buy a ship when and 
where it seems best, he can not sail it under his coun- 
try's flag. If a foreign vessel is wrecked upon our 
coast and the wreck bought by a citizen, he can use it 
for wood, but he cannot register or enroll it unless 
he is able to testify that the repairs which he has put 
upon it are equal to three-fourths of the cost of the 
vessel when so repaired. 

Years ago President Cleveland said of these statutes 
which I have cited : "The ancient provision of our law 
denying American registry to ships built abroad and 
owned by Americans appears, in the light of present 
conditions, not only to be a failure for good at every 
point, but to be nearer a relic of barbarism than any- 
thing that exists under the permission of a statute of 
the United States. I earnestly recommend its prompt 
repeal." And still this relic of barbarism lingers, and 
we are deprived of our Yankee birthright to "swap" 
our money for ships. We can sell our ships to Eng- 



96 THE TARIFF AND THE TRUSTS 

land, for she buys them from any country where she 
can get them cheaper than she can make them, but we 
cannot buy a ship of her or of any other country. Of 
this condition an eminent Scotch shipbuilder has said: 
''It is a matter of regret to us that there is likely to 
be a change in the American registry laws. For the 
last thirty years they have permitted us to build, and 
largely to own, nearly all the ships that the ocean-car- 
rying trade requires; and they have caused a loss to 
their people of about £40,000,000 annually of freight 
money that they might have appropriated to them- 
selves. Their new policy of free ships, if adopted 
now, would unquestionably benefit our shipyards for 
one or two years ; but the competition to which Amer- 
ican shipwrights would be forced would soon enable 
them to divide with us the shipbuilding, and their 
countrymen to divide with us the ship-owning of the 
world, in both of which industries they have hereto- 
fore so kindly given us the practical monopoly.'' 

In view of the fact that the New England shipbuild- 
ing industries in the main have long since passed away 
as a result of this navigation act and of protective 
tariffs, it may be of interest to see the part which New 
England played in bringing about this condition. In 
the Convention framing the Federal Constitution, two 
questions agitated New England and the South, the 
questions of slavery and the regulation of commerce. 
The Southern people, who were at that time free 



AMERICAN AND ENGLISH SHIPPING 97 

traders, desired slavery and the legalization of the 
slave trade. New England, having at that time large 
shipbuilding interests, wished the national government 
to regulate commerce and to pass a navigation act for 
the protection of its shipbuilding interests. The dis- 
cussions in the Convention resulted in the selection of 
a committee made up of Southern and New England 
members, and in a compromise by which New Eng- 
land got her navigation act in return for her consent 
to the continuation of the slave trade, the New Eng- 
land members consenting to the clause afterwards 
made a part of the Constitution, that the slave trade 
might be continued until 1808, and the Southern men 
in return agreeing that the National Government 
might be given the power to regulate commerce. To- 
day the shipbuilding of New England has gone, com- 
paratively few men are engaged in the sailing of her 
ships, she is without coal or iron for her factories, and 
is pleading with the nation to remove the protective 
tariff upon coal, hides, lumber, iron and other products 
which she can buy more cheaply of Quebec, New 
Brunswick and Nova Scotia. 

The second reason for the decadence of our 
merchant marine is the increased cost of ships because 
of our protective tariflf. The steel which the English 
shipbuilders use in the making of their best ships Is 
made from ore produced in Spain and Sweden. The 
brass for her ships comes from Spanish and American 
7 



98 THE TARIFF AND THE TRUSTS 

copper, the zinc from Germany, the wood-work from 
America or Norway, the ropes from Russia, and the 
hemp from the PhiHppines, and these are all admitted 
free of duty. The cost of the same material entering 
into American ships is about forty per cent, greater 
than the cost of the products used by English ship- 
builders by reason of the increased price which the 
steel trust and the other trusts are able to exact 
through the tariflf and the trust for their materials. 
It is true that there is a provision in the Dingley Bill 
that all materials of foreign production which may be 
necessary for the construction of vessels built in the 
United States for foreign account and ownership, or 
for the purpose of being employed in the foreign trade, 
may be imported in bond under such regulations as 
the Secretary of the Treasury may prescribe, and up- 
on proof that such materials have been used for such 
purposes no duty shall be paid thereon. The statute 
however has a provision which practically nullifies its 
beneficial eflfect, for it provides: ''But vessels receiv- 
ing the benefit of this section shall not be allowed to 
engage in the coastwise trade of the United States 
more than two months in any one year, except upon 
the payment to the United States of the duties of 
which a rebate is herein allowed. Provided, that ves- 
sels built in the United States for foreign account and 
ownership shall not be allowed to engage in the coast- 
wise trade of the United States." But American 



AMERICAN AND ENGLISH SHIPPING 99 

ship-owners do not build deep-sea ships, though in- 
tended for use in foreign commerce, without consid- 
ering that some day they will be able to fall back on 
the coastwise trade which is now extended to Hawaii 
and Porto Rico, and will soon include the Phillippines ; 
so that this provision of the statute has been availed 
of for the complete construction of but one large 
steel ship, the Dirigo, built by Arthur Sewall & Co. 
at Bath, Maine. 

The builders of ships who appeared before the 
United States Commission of Mercantile Marine in 
1904 claimed that the increased cost of materials for 
shipbuilding was one of the chief reasons for invok- 
ing subsidies for American shipping. Mr. Orlott, 
President of the Newport News Shipbuilding and 
Drydock Company, when a witness before the United 
States Commission, said : "There is a difference of 
about forty per cent, [in the cost of shipbuilding] on 
account of the tariff. . . . Because everything in the 
way of material entering into the construction of a 
ship is highly protected here. It is not only the steel 
that forms the hollow of the vessel that is affected in 
price; it is every conceivable item that goes into a 
ship." In the Monthly Summary of Commerce and 
Finance of the United States for August, 1900, pre- 
pared by the Bureau of Statistics of the United States 
Treasury, the statement is made that '^the progress of 
work on shipbuilding in the United States has largely 



lOO THE TARIFF AND THE TRUSTS 

been retarded because makers of steel materials re- 
quire a higher price from the American consumers than 
they do from foreign consumers for substantially- 
similar products." And this government official sug- 
gests as a remedy ''a reduction of the tariff on un- 
finished iron and steel/' in order to equalize the oppor- 
tunities of our shipbuilders with those of the builders 
of ships in foreign countries. 

But one of the most substantial reasons for the 
decadence of our shipping is the decrease of commerce 
with other countries which results naturally from our 
protective tariff. We read in foreign newspapers 
about the American peril, the dumping of our manu- 
factured products upon European countries, and one 
would think from these statements that we had be- 
come the greatest exporting nation of manufactured 
products in the world. Our people are capable of 
becoming the greatest exporters of manufactured 
products, and but for the restrictions upon our com- 
merce by the tariff we would have long since attained 
that position among the nations, but we are far from 
being such to-day. In the year 1903 we exported of 
what are designated as manufactured articles only 
$421,453,915. In the same year Great Britain ex- 
ported of manufactured products about $1,200,000,000. 
Of that $421,453,915 which we exported in 1903, 
$109,356,177 were copper and mineral oils, which 
hardly can be regarded as manufactured products, 



AMERICAN AND ENGLISH SHIPPING lOI 

while the manufactured products exported from 
Great Britain were what are known as highly manu- 
factured products. So the reader will see that, in- 
cluding in our exports copper and oil as manufactured 
products, Great Britain's exports of manufactured 
products, when her population of forty million is com- 
pared with ours of eighty million, are more than five 
times as much for every man, woman and child in that 
country; that is, one Englishman makes for export 
more than five times as much as one American. The 
exports of Great Britain of manufactured products in 
the year 1902 were about the amount of the exports 
of manufactured products from both Germany and 
France combined. Our farmers are our exporters, 
and the reason why our manufacturers export so little 
is that we import comparatively so little. You can- 
not sell abroad unless you buy abroad, because ex- 
porting is merely exchanging the commodities of your 
own laborers for the commodities made by the labor- 
ers of other countries. In the first instance and in the 
last instance commerce is nothing but exchange, and 
the balance of trade indicates little or nothing as to 
the real transaction, which is essentially a transaction 
of give and take, of goods for goods. Never was the 
principle more tersely and correctly stated than by a 
Massachusetts member of the House of Representa- 
tives in 1790 which enacted what is known as the 
Hamilton Tariff. That tariff imposed a duty upon 



102 THE TARIFF AND THE TRUSTS 

molasses, and when it was being discussed before 
the House of Representatives, this member from Mas- 
sachusetts arose and said: "We up in Massachusetts 
do not want that duty upon molasses, we trade our 
fish for molasses, and if you shut out molasses you 
shut in fish/' Mr. H. Russell Rea, a member of the 
House of Commons in England, recently produced be- 
fore the Commons a carefully prepared table showing 
the relations between the tariffs of a country and the 
amount of its steam shipping tonnage which, more 
forcibly than anything that I can say, will show that 
restrictions upon trade in the nature of protective 
tariffs destroy commerce between nations, and there- 
fore the shipbuilding industry. The average ad 
valorem import duty to the United States by this 
table is 73 per cent., but that is the average ad valorem 
duty upon dutiable manufactured products exported 
from England to the United States, and with that 
correction I submit this table as tending strongly to 
prove my contention: 

Average ad valorem 
import duties 

Russia 131 

United States 73 

Austria-Hungary 35 

France 34 

Italy 2j 

Germany 25 

Sweden 23 

Greece 19 

Denmark 18 

Norway 12 

Holland 3 

United Kingdom. No Protec- 
tionist tariff 



Steam Shipping 


tonnage per 


inhabitant 


Russia I ton to every 330 


United States 


166 


Austria-Hungary 


no 


France 


71 


Italy 


72 


Germany .... 


34 


Sweden 


24 


Greece 


12 


Denmark .... 


9 


Norway 


4 


Holland 


15 


United Kingdom 


4.6 



AMERICAN AND ENGLISH SHIPPING IO3 

Now let us examine the causes of the navigation 
acts, the condition of American shipping in the colon- 
ial and early history of the country and its present 
condition. During colonial days, a long series of 
protective statutes intended to destroy American ship- 
ping were passed by the English Parliament, but they 
availed little or nothing. It seemed that some way 
the colonists were born to the sea, for they built ships 
and sailed ships and sold ships and the materials for 
ships to England, and a ship could be built in those 
times in America with high-priced labor cheaper than 
anywhere else in the world. In the year 1779 alone, 
we built 389 vessels. In 1789, when we began regis- 
tering our tonnage, we had 123,893 registered tons 
engaged in foreign trade and 77,669 tons engaged in 
domestic trade, a high percentage of the tonnage of 
the civilized world at that time. Prior to the treaty 
of 1783, ending the Revolutionary War, the American 
colonies had been permitted to trade with the other 
British possessions in America ; but that privilege was 
not continued by the treaty. Soon after that treaty a 
terrible hurricane occurred in the West Indies, destroy- 
ing all the crops and leaving tens of thousands of peo- 
ple in a starving condition, and because of England's 
Navigation Act and our consequent inability to reach 
these people with food, fifteen thousand slaves were 
known to have died in a short time from starvation. 
But, notwithstanding England's Navigation Act and 



I04 THE TARIFF AND. THE TRUSTS 

her cutting us off from trade with her colonies, the 
building of ships and the sailing of ships went on. 
When John Adams became the first representative of 
the United States at the British Court he sought to 
convince Lord Carmarthen, the foreign secretary, of 
the desirableness of both countries repealing their 
navigation acts, but with no success. England made 
her ships at home, instead of buying them of Amer- 
ica, and made them of inferior workmanship and at a 
higher cost. Thirty years after, in the war of 1812, 
she gathered the fruits of her narrow policy, and saw 
frigate after frigate outsailed and defeated in single 
combat with American antagonists. The provision 
forbidding our purchase of foreign ships afifected our 
own shipping interests but little, since we could then 
build wooden ships cheaper than any other people in 
the world and the duties upon materials going into 
ships under the Hamilton Tariff were very low. By 
18 1 5 the tonnage engaged in foreign trade was 438,863 
tons. In 1840 England did away with the provisions 
prohibiting us from trading with her American 
colonies, and in 1849 she repealed all of her restrict- 
ive navigation laws, from that time on there being no 
restriction against us in any part of her domain. Our 
building of ships went on with great rapidity. Many 
centers of shipbuilding grew up in this period in New 
England, The clink of the shipman's hammer sound- 
ed all along her coast. The beautiful spectacle of the 



AMERICAN AND ENGLISH SHIPPING IO5 

launching of the ship was a common one. Those were 
the days of the clippers and liners, the Great Republic, 
the Defender and the Sovereign of the Seas. Mr. 
Gladstone, in 1881, speaks of seeing in his earlier 
days the beautiful American liners and packets be- 
tween New York and Liverpool, which, he says, car- 
ried the pick of the trade between the two countries. 
Of our position in shipbuilding he says : ''The Amer- 
icans were deemed to be entirely superior to us in 
shipbuilding and navigation; they had four-fifths of 
the whole trade between the two countries in their 
hands; and that four-fifths was the best of the trade, 
and but the dregs were left.'^ In 1861 our total ton- 
nage, both domestic and oversea, was 5,539,813, only 
about 350,000 tons short of that of the whole British 
Empire at that time. In 1861 we actually owned 
about one-third of the entire tonnage of the world. 
In the year 1855 we built 2,027 vessels of 583,450 tons 
burden. For the year ending June 30, 1856, the total 
value of our imports and exports carried in American 
vessels was $482,268,274, while the amount carried in 
foreign vessels was $159,336,576. By 1869 our flag 
had almost departed from the ocean, and a Congres- 
sional investigation was instituted to find out the cause 
of the decadence of American shipping. Before the 
committee came members of the New York Ship- 
owners' Association, and they unanimously agreed 
that the cause was that ships were now being built 



lo6 THE TARIFF AND THE TRUSTS 

from iron and not from wood, that the price of iron 
and steel and the materials in a ship were so high that 
our ship-owners could not produce them as cheaply as 
they could buy them, and that the Navigation Act for- 
bidding the registry of a ship built in other countries 
and purchased by Americans should be repealed. But 
Congress seemed to think that it was better to pro- 
tect one American shipping firm than to have hundreds 
of vessels flying our flag and plying between our ports 
and those of other countries. In 1816 Daniel Webster 
said: "How, sir, do ship-owners and navigators ac- 
compHsh this? How is it that they are able to meet 
and in some measure to overcome universal competi- 
tion? Not, sir, by protection and bounties, but by un- 
wearied exertion, by extreme economy, by unshaken 
perseverance, by that manly and resolute spirit which 
relies on itself to protect itself." All such kind of 
advice has passed away, and the hardy race of seamen 
has gone with it. No call from the sea sounds for 
America. Seldom is our flag seen upon it. But we 
are a great country, for we have our Cramps and their 
shipyards. 

But Mr. Cramp has made some return for the favors 
of Congress. In 1870 the Cramp Company built four 
steamships known as the Indiana, Illinois, Pennsyl- 
vania, and Ohio, for the American Steamship Com- 
pany. Let me give to the reader an extract from Mr. 
Cramp's testimony before the Industrial Commission 



AMERICAN AND ENGLISH SHIPPING IO7 

in December, 1900, about the building of these steam- 
'ers and their history. It will well show the depths to 
which our oversea shipping had fallen. He said : 
^'There were at that time indications that the policy of 
the general government toward the national merchant 
marine would be liberal, and it is probable that these 
indications had some bearing upon the action of the 
American Steamship Company; but if so, the policy 
was altered too soon to realize any benefit, and its sub- 
sequent career presented the aspect of an unequal and 
of course unsuccessful contest between an unaided 
private American enterprise and British competitors 
backed by all the resources of their powerful govern- 
ment. . . . Suffice to say that for more than two dec- 
ades before 1893 they (the Indiana, Illinois, Pennsyl- 
vania, and Ohio) have had the melancholy distinction 
of being the only merchant steamships to show the 
stars and stripes regularly in the ports of western 
Europe, and in the three hundred and odd passages 
that each of them has made, their performance has in- 
variably been excellent. At any rate, though over- 
shadowed in size and distanced in speed by later 
products of the fierce competition which has followed 
their advent the four American ships have served to 
tide the name of the American merchant marine over 
a score of weary and disheartening years; and now, 
in the days of a brighter epoch, they remain sturdy 
links connecting the promise of the future with the 



I08 THE TARIFF AND THE TRUSTS 

glories of the past. It has been no easy errand to keep 
the American flag fluttering upon a North Atlantic 
steamship since 1872; but these four ships have done 
it, etc." Are there any greater pessimists than the 
men who maintain their shipyards by government aid, 
always urging their fears of competition as the reason 
for giving them such laws as they desire? Is this 
the kind of spirit from which we may expect the de- 
velopment of our country ? The men who established 
American liberty and developed American civiHzation 
were men who did not fear to grapple with fate un- 
aided, who asked no odds but a free chance and a fair 
show. 

Now, let us see what this policy of restriction has 
brought upon our country. In i860 we had 60,000 
gallant sailors, and they used to beat the sea. Our 
flag was in every port of the globe. We carried the 
greater part of our exports and imports in American 
vessels under the American flag. The tonnage of 
vessels engaged in the foreign trade of the United 
States in 1855 was 2,348,358 tons. In 1875 it was 
1,515,598 tons; in 1895, 822,347 tons; and in 1905, 
943,750 tons. Mr. Meikle, secretary of the Seattle 
Chamber of Commerce, produced before the United 
States Commission on the Mercantile Marine in 1904 
a statistical table showing that, while in 1821 the per- 
centage of the import and export trade of the United 
States carried in American bottoms was 88.7 per cent., 



AMERICAN AND ENGLISH SHIPPING IO9 

it had fallen in 1900 to 9.2 per cent., at which figure it 
remained at that time. During the year 1904 not a 
single oversea merchant steamer was launched from 
American yards. 

And what remedy do the shipbuilders offer for this 
condition ? They infest the lobbies of the capital beg- 
ging Congressmen for bounties and subsidies in order 
to balance the "pauper labor" of England and make up 
for tariff extortions. They will not relinquish one 
privilege under the old navigation act, and they insist 
on its being continued, notwithstanding the fact that 
all the other nations of the civilized world have done 
away with this barbarous provision, even Japan and 
China having repealed their navigation acts, not only 
for their foreign, but also for their coastwise trades. 
Alone in all the world we stand, hanging to our old 
navigation laws enacted about 115 years ago. The 
only remedy by which politicians and ship-owners pro- 
pose to restore our flag to the sea is, first, to cut off 
foreign trade by protective tariffs and then impose 
taxes on the farmer, the merchant, and the consumer 
to raise money for subsidies to pay to the shipbuilder. 
Tax the people once for tariff, make them pay an in- 
creased price for the necessaries of life to sustain our 
manufacturers, and then turn around and tax them all 
over again to make up for the burdens imposed by the 
first tax upon shipbuilders. This equalizes matters 
beautifully. Commerce upon the seas is the handmaid 



no THE TARIFF AND THE TRUSTS 

of liberty. If we would preserve our liberties, let us 
remove the shackles which this old Navigation Act 
and a protective tariff have put upon our commerce, 
and breed a new race of sailors as hardy and as skill- 
ful as the old. 

Now let us look at the picture of what free trade 
and free ships have done for Great Britain. At the 
time of the treaty of peace between the American Fed- 
eration and England in 1783 England had a Naviga- 
tion Act quite as barbaric as our own to-day. In the 
colonial times, as stated above, our vessels were per- 
mitted to trade with the other colonies of Great Brit- 
ain in America; but in the treaty of 1783 she would 
not recognize that right, nor would the English Gov- 
ernment upon the urgent request of Mr. Adams, our 
first Minister, mitigate in the slightest the rigor of 
her Navigation Act in return for more liberal laws up- 
on our part. Bitterness between the countries arose 
from the attitude of Great Britain, and probably our 
Navigation Act, passed in Washington's administra- 
tion, was largely the result of that feeling. Our Nav- 
igation Act was modified toward greater severity in 
1816, immediately after the war of 1812 had termi- 
nated, and while the bitter feelings aroused by that war 
were still fresh. The age of iron ships, however, had 
not yet apperaed. A ship built from oak or cedar 
could be built in those days at Gloucester or Salem 
much cheaper than it could be built in England from 



AMERICAN AND ENGLISH SHIPPING III 

wood procured along the Baltic. In 1815 the Napole- 
onic war, which had made American bottoms the only 
safe ones, was ended; and from 1815 on till the break- 
ing out of the Civil War the struggle between the Unit- 
ed States and England for supremacy on the sea con- 
tinued. The tide in favor of England turned with 
her repeal of the Navigation Acts in 1849 ^^^ ^he in- 
troduction of iron ships. This repeal was opposed by 
shipbuilders, who declared that it would result in the 
ruin of the merchants, that the shipyards would be- 
come grass-grown, that the British flag would depart 
from the sea, and that every evil conceivable would 
result from the repeal of these antiquated laws; but, 
in spite of these protestations, it v/as repealed in the 
same year that the repeal of the Corn Laws took effect. 
As stated above, the repeal of the Navigation Act al- 
lowed our steamers to engage in the coastwise trade of 
Great Britain and of all of her colonies, and ever since 
an American ship has had every right in every port of 
Great Britain and of all of her colonies which her own 
ships have had. Soon after the repeal of the Navi- 
gation Acts came the building of iron ships, and with 
the building of iron ships the prosperity of English 
shipping increased more rapidly than that of Amer- 
ican shipping, because England admitted free of duty 
the steel, brass, zinc, ropes, hemp, and everything that 
went into the making of a ship, while even under the 
Walker Tariff in this country there were moderate 



112 THE TARIFF AND THE TRUSTS 

duties Upon these articles. The comparative growth 
of the British tonnage since the repeal of the Naviga- 
tion Acts and the decadence since i860 of our own 
oversea tonnage is shown in the following table: 

British Net United States 

Oversea Tonnage* Gross Tonnage 

1850 3,565,133 1,585,711 

i860 4,658,687 2,546,237 

1870 5,690,789 1,516,800 

1880 6,574,513 1,532,810 

1890 7,978,538 946,695 

1900 9,304,108 816,795 

1901 9,608,420 889,129 

The loss between i860 and 1870 in our own country 
of oversea tonnage is largely accounted for by the 
destruction of our merchant marine in the Civil War ; 
but it is to be observed that since 1870 there has been 
no improvement, and since 1880 the loss has been go- 
ing on with great rapidity. England has become to 
some extent the carrier, not only of the greater por- 
tion of her own exports and imports, but of a consid- 
erable part of the exports and imports of other coun- 
tries. Besides her regular liners running to the 
United States, Canada, the West Indies, to China and 
Japan, to India and to other countries, amounting 
roughly to 1,300 vessels, she has also an immense fleet 
of steamers and sailing vessels known as tramps, ap- 
proximating in number 14,000. These go everywhere, 
compete against everybody, cut into trade British, 
foreign or colonial, wherever they can see profit, sail 



AMERICAN AND ENGLISH SHIPPING II3 

from foreign port to foreign port, and remain abroad 
often for many years, and come home only in order to 
complete the repairs necessary for them to retain their 
Lloyd's classification. According to Lloyd's Register 
of the oversea tonnage of the world's sail and steam, 
the British flag is flown by nearly one-half of sailing 
vessels, and more than one-half of the steamers. Out- 
side of Great Britain, there is an average of one ton 
of shipping of all kinds to every 33 inhabitants, while 
the entire tonnage, steam and sail, of the United King- 
dom is equal to one ton to every four of its inhabitants. 
One out of every 36 of the adult male population of 
Great Britain earns his living on the sea. Of a total 
gross tonnage of ocean-going mercantile vessels in 
the whole world of 30 1-3 millions of tons 14^ millions 
of tons belong to Great Britain and her colonies or 
48 per cent, of the whole, and of this 14^ millions 
88 per cent, belongs to the mother country. But these 
figures by themselves do not give an adequate view of 
England's predominance, unless account be taken of 
the quality as well as the quantity of the ships owned. 
It is commonly reckoned that one ton of steam ship- 
ping is equal to four tons of sailing tonnage in effi- 
ciency, and in the year 1900 more than eighty per cent, 
of British shipping consisted of steam-shipping, while 
of the shipping of the rest of the world only seventy 
per cent, was steam tonnage. With this correction 
Great Britain's proportion rises to fifty per cent, of 
8 



114 'THE TARIFF AND THE TRUSTS 

the sailing and steam tonnage of the whole world. 
This is true in spite of the fact that France, Russia, 
Spain, Portugal, and the United States have reserved 
their coasting trades for vessels flying their own flags, 
whilst the coasting trade of Great Britain and her 
colonies, as stated above, is open to the vessels of all 
nations. But France (except Algeria), Germany, 
Holland, Denmark, Sweden and Norway, Belgium, 
Austria and Italy, permit British vessels to trade with 
their oversea possessions; the only countries which 
prevent all other foreigners from invading their coast- 
wise colonial trade are the United States, Russia and 
Spain. The United States, which ought to be leading 
all other countries in liberty, in shipbuilding and in 
commerce, alone among all nations preserves the pro- 
vision that its own citizens shall not be allowed to 
register vessels built in other countries, and, with 
Russia and Spain, prohibits all foreigners from enjoy- 
ing its colonial coastwise trade. The tramp steamers 
which run from and return to English ports, carrying 
largely coal in their outward voyage, return with 
grain, timber, cotton and other bulky cargoes on their 
homeward voyage. Since the year 1900 we have been 
the producers of the greatest amount of coal annually 
of any country in the world. Our deposits of coal 
are the greatest to be found in any country in the 
world. Our production of iron and steel is the great- 
est in the world, and, as mentioned in prior chapters. 



AMERICAN AND ENGLISH SHIPPING II5 

we produce about as much pig iron yearly as any oth- 
er two countries in the world. The supremacy in 
steamships in the future lies with the country produc- 
ing the greatest amount of coal, iron and steel. With 
free ships and free trade in the material which goes 
into the building of a ship, we can soon lead the world 
in the number of our steamships. 

In the debate in the House of Commons on the Corn 
Laws in 1842 a member. Captain Layard, said that 
when he was in China he had been shocked at the 
barbarous custom of contracting the feet of the chil- 
dren, and he had expressed his surprise to some 
Chinese gentlemen at its continuance. They apolo- 
gized for it by explaining that there were certain old 
women who made their living doing this work, and 
that the welfare of these old women required the 
maintenance of the practice. When the stage coach 
gave way to the railway, the stage drivers appealed 
to a sympathetic public that they would be ruined if 
steam railways were allowed to continue. The first 
gas company was formed in London in 1807. Speak- 
ers in the House of Commons contended that if the 
bill were to pass, it would throw out of employment 
ten thousand seamen engaged in the whale fisheries 
and thousands of rope-makers, sail-makers and mast- 
makers connected with that trade. The owners of 
American shipyards appeal to the shining example of 
China, and say to us, as the Chinaman says, "Let us 



no THE TARIFF AND THE TRUSTS 

have as few dealings as possible with 'foreign devils.' " 
Are we really living in an age of enlightenment when 
we adopt as a model the example of China? Are not 
the people actually impotent in their inability to re- 
peal this barbarous statute? Are the private interests 
of the Cramps to control the policy of a great nation 
like ours ? Let us commence legislating upon the prin- 
ciple of the greatest good to the greatest number in- 
stead of the greatest good to the Cramps. 



CHAPTER IV 

PROTECTIVE TARIFFS AND PUBLIC VIRTUE 

The most important consideration for the patriotic 
citizen in connection with the tariff question and the 
trust is their effect through poHtical parties upon Con- 
gressmen, upon beneficiaries of the tariff, upon the 
lives and characters of the men and women who are 
the real strength of the Republic. The seekers after 
protective tariffs have been corrupting both them- 
selves and our public men. If the true history of 
tariff legislation could be written, the revelation would 
arouse the whole people to indignation. If it did not 
arouse them to such indignation, it would be con- 
clusive proof that our people do not appreciate free 
government, and do not appreciate the evils which en- 
danger it. Many years ago the industrial captains of 
the country and the political leaders struck hands, 
with the result that both political parties have lost 
sight of the public welfare. There was never a great- 
er danger to government than has come from this un- 
holy alliance. Think of the terrific power created 
when political parties and the government ally them- 
selves with the industrial wealth of the trusts. You 

117 



Il8 THE TARIFF AND' THE TRUSTS 

there unite the two most powerful tendencies in our 
national life, the pursuit of wealth on the one hand 
and the pursuit of political power on the other; and 
the affiliation is one which will surely corrupt the peo- 
ple and eventually wreck the government. Christ, 
with a profound knowledge of human nature, taught 
his disciples to pray that they should not be led into 
temptation. Though a considerable proportion of the 
American people profess his teachings, yet they have 
deliberately given to their legislators the power, by 
Congressional enactment, of transferring millions of 
dollars from the hands of the people to the pockets of 
a few industrial leaders. A more stupendous instru- 
ment for corrupting Congressmen than the lodging of 
this power in them was never conceived by the per- 
verse ingenuity of man. Place three or four hundred 
Republicans or Democrats of approved honesty in 
Congress, continue them there for a few years under 
the temptation of such an alliance of public power 
with private business, and a considerable proportion 
of their number will surely yield to the temptation to 
make money out of tariff legislation. Daniel Webster 
well said, 'The deadliest canker that can attack the 
heart of a nation is the corroding disease of commer- 
cial avarice." This commercial avarice, the fiercest 
passion that burns in the heart of man, is closely allied 
with that other passion of ambition for power and 
place but little less terrible in its intensity. Congress- 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE II9 

men and United States Senators early saw the danger 
from this alliance, and prophesied that it would result 
in the ruin of their country. In 1828 Senator Mc- 
Duffie, of South Carolina, in opposing the passage by 
the United States Senate of the tariff act of that year 
said : "Sir, when I consider that by a single act like the 
"present from five to ten millions of dollars may be 
"transferred annually from one part of the commu- 
"nity to another ; when I consider the disguise of dis- 
"interested patriotism under which the basest and 
"most profligate ambition may perpetuate such an act 
"of injustice and political prostitution, I cannot hesi- 
"tate for a moment to pronounce this very system of 
"indirect bounties the most stupendous instrument of 
"corruption ever placed in the hands of public func- 
"tionaries. It brings ambition and avarice and wealth 
"into a combination which it is fearful to contemplate, 
"because it is almost impossible to resist. Do we not 
"perceive at this moment the extraordinary and mel- 
"ancholy spectacle of less than a hundred thousand 
"capitalists, by means of this unhallowed combination, 
"exercising an absolute and despotic control over the 
"opinions of eight millions of free citizens and the 
"fortunes and destinies of ten millions ? Sir, I will not 
"anticipate or forbode evil, I will not permit myself to 
"believe that the Presidency of the United States will 
"ever be bought and sold by this system of bounties 
"and prohibitions; but I must say that there are cer- 



I20 THE TARIFF AND THE TRUSTS 

"tain quarters of this union in which if a candidate for 
"the Presidency were to come forward with the Har- 
"risburg Tariff in his hand, nothing could resist his 
"pretensions if his adversary were opposed to this un- 
"just system of oppression." The same foreboding 
of evil to our free government from this cause is found 
in the last message of President Jackson to Congress ; 
and I submit that these prophesies are being sadly 
realized in our day. 

"Are Congressmen bought by the Trusts?" the 
reader asks. Undoubtedly in some cases. A man 
with the resolve to do his duty is elected to Congress. 
The air around him in Congress is heavy with the cry 
of corruption. He becomes satisfied that conditions 
of corruption exist. He hears no indignation ex- 
pressed at their existence, and by and by he falls. By 
what is too frequently regarded as a successful stroke 
he gets more in a day than he can earn in a year by 
patient effort. You, the American people, have 
recognized the right of government to confer favors 
upon private business, and you have created the temp- 
tation which became too strong for this man, and you 
are accountable to some extent for his fall. If you 
doubt that men fall in this way, let me call your atten- 
tion to one case which will illustrate many others. 
From 1867 on the Pacific Mail was seeking subsidies 
from the National Government through Congress. 
They procured subsidies amounting to millions of 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE 121 

dollars, but later in 1874 it was disclosed that Allen 
Stockwell, the president of the Pacific Mail, with the 
consent of the directors of the Company, spent, through 
its agent, Irwin, nearly a million dollars among Con- 
gressmen to secure the bill granting the subsidy. J. 
G. Schumaker, a member of the House of Representa- 
tives, was found to have received $300,000, for which 
sum he could not account through failure of memory. 
The circumstances tended to show that he distributed 
this money among other members. King, the Post- 
master of the House of Representatives, who had also 
been elected as a member of Congress, fled to Canada. 
Other members of Congress were thought to be im- 
plicated, but no proof could be obtained. The Pacific 
Mail is only one of many such cases which the reader 
will recall. In those days the disclosure of the fact 
that a public man had been even remotely connected 
with such a transaction resulted in his dropping out of 
public life. You will all remember that the name of a 
man who had been Vice-President of the United States 
appeared in connection with alleged corruption, and 
he retired from public life. You will all remember 
what resulted from the disclosures with reference to 
the famous ''Credit Mobilier." 

The approved method, however, of procuring tariflf 
legislation is by contributions on the part of trusts 
and other beneficiaries of the tariff to the campaign 
disbursements of both political parties in cases where 



122 THE TARIFF AND THE TRUSTS 

they are in doubt as to which party will win. The 
mightiest of all the influences which bring about the 
nomination and election of Presidents and Congress- 
men, of Mayors and Aldermen, is the financial aid 
which the great trusts and their allied corporations 
are ready and anxious to contribute to political funds. 
In national campaigns about every protected trust 
opens its bank balance to one or both political parties. 
The right to tax the Roman people and provinces in the 
days of Rome's fall was sold at auction by the Praeto- 
rian Guards. The right to tax the American people by 
these giant trusts is sold just as surely and just as 
clearly in every national campaign. The party man- 
ager says to the manufacturer, **You cannot make a 
more profitable investment. Protection has made you 
rich, free trade will make you poor. If we are beaten, 
our adversaries will give you free trade. These are 
the conditions. Come down with your cash." This 
argument, followed by the gifts of money, puts the 
control of the tariff question touching every man, 
woman and child in the United States in the hands of 
political leaders and United States Senators who have 
actually taken the money of the corporations under a 
pledge to give them what they want. Has the reader 
any doubt about this? Let us see. In 1888 James B. 
Foster, the president of a political league, wrote the 
famous letter in which this language appears: ''The 
manufacturers of Pennsylvania, who are more highly 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I23 

protected than anybody else, and who make large for- 
tunes every year when times are prosperous, are not 
giving as they ought to. If I had my way about it, I 
would put the manufacturers over the fire and fry all 
the fat out of them." When you find great insurance 
companies during the last few years paying hundreds 
of thousands of dollars to the campaign committees 
of political parties in national campaigns, where the 
directors of those companies are in almost every case 
closely connected with great manufacturing and rail- 
road interests, do you still doubt that the direct bene- 
ficiaries of the tarifif, the trusts, pay their good money 
to political leaders and United States Senators? Do 
men give large sums for campaign disbursements to 
political parties without expecting some return? An 
official of the National City Bank of New York after 
the election of 1896 delicately reminded the Secretary 
of the United States Treasury of the obligations which 
his party owed to that great banking institution for 
financial contributions in the campaign, and suggested 
that obligation to this high official as a reason why he 
should grant favors to the City Bank. Such obliga- 
tions seem to be recognized at Washington, since in 
1899 the Secretary of the Treasury entered into a con- 
tract with the National City Bank to sell the Bank the 
old Custom House property occupying an entire block 
in Wall Street for $3,265,000, which sum is estimated 
by real estate men to be about one-half its real value. 



124 THE TARIFF AND THE TRUSTS 

At the time of this purchase the National City Bank 
had many milHons on deposit belonging to the Nation- 
al Government, and it paid the Government on ac- 
count of the purchase price $3,215,000, leaving a 
balance due the Government of $50,000. It made this 
payment by transferring on the books of the Bank that 
amount from one account to the other, never really 
paying a single dollar of money to the Government, 
but giving it credit for the amount of its purchase. 
The Bank, having paid for the property, should have 
taken a deed thereof and have paid its taxes on it to 
the City. Instead, it rented the building to the United 
States Government as a Custom House from that day 
until the present time for an annual rental of $130,600, 
but left the title in the Government, thus avoiding the 
payment of all taxes thereon. Such returns for cam- 
paign disbursements are the order of the day. Mr. 
Herbert S. Hadley, the Attorney-General of Missouri, 
recently well said: ''If you search for an explanation 
as to how and why it was that the City Counsel or 
State Legislator has been bribed, you will, in the great 
majority of cases, find that some business interest has 
been seeking some special privilege or dishonest ad- 
vantage which it could not secure by the honest judg- 
ment of the representatives of the people." 

Now, let us see how the giving of money by trusts 
affects the result of elections. In a national election 
in the average doubtful state forty per cent, of the 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE 125 

people will vote the Republican ticket, and another 
forty per cent, of the people will vote the Democratic 
ticket in any event, and in such a state the party gets 
the electoral vote which controls a majority of the re- 
maining twenty per cent. With the money furnished 
by trusts the parties controlling the campaign seek to 
procure a majority of that twenty per cent., first prob- 
ably by trying to convince them that their interests lie 
with the party seeking their votes, and eventually by 
purchasing a considerable portion of their votes if 
they cannot be obtained in any other way. In 1888 
William W. Dudley, Treasurer of the National Re- 
publican Committee, said in a letter of instruction to 
the campaign workers of his party in the State of 
Indiana: "Divide the floaters into blocks of fives and 
put a trusted man with necessary funds in charge of 
these fives, and make them responsible that none get 
away, and that all vote our ticket." A few years 
earlier Barnum, of Connecticut, Chairman of the 
National Democratic Committee, sent his celebrated 
order for the purchase of ''mules." One party or the 
other having succeeded in the election of their Presi- 
dential candidate, the time for making return for the 
money arrives, and a powerful Senator who knows 
who contributed, or a political leader who dictates the 
action of his party, sees to it that the return therefor 
is made in tariff or other favors. Many a time a 
member of Congress votes for measures which he 



126 THE TARIFF AND THE TRUSTS 

knows or ought to know are wrong, and his only re- 
turn is the consciousness that he has paid a poHtical 
debt for his party and cared for the interests of some 
rich corporation which has contributed Hberally. 
Henry Loomis Nelson, now Professor of Political 
Economy in Williams College, in January, 1900, wrote : 
'^Since 1875 Congress has not legislated on the tariff: 
it has simply affirmed or ratified the decrees of the 
beneficiaries of the tariff. These people have trans- 
formed the government into a socialism, in which they 
are not merely the favored class, they constitute the 
only class. The House of Representatives passed the 
Mills TBill of 1888, but the Senate was then Republican 
and protectionist, and the protected interests turned 
the bill into a protection measure. The popular 
branch of Congress also passed the Wilson Bill in 
1894, but the protected interests transformed it in the 
Senate through the aid of Democratic Senators.'' It 
is no longer a question between political parties 
whether this matter of bribery shall go on. Its im- 
portance rises mountain high above all partisan con- 
siderations. No truly patriotic citizen ought to care 
a fig whether the Republican party or the Democratic 
party goes up or down, if the party really in power 
gets there without using such practices, truly repre- 
sents public opinion, and legislates wisely with refer- 
ence to public interests. This question of the use of 
money to control legislation ought to rise in impor- 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I27 

tance far above one's party affiliations. The trust 
which furnishes money to carry on campaigns under 
an implied agreement that in case of victory such leg- 
islation as it desires shall be passed is a hundred times 
more dangerous to the existence of our free govern- 
ment than any anarchist who has ever threatened the 
life of our rulers. The men who purchase such legis- 
lation do not assail mere individual life; they assail 
the life and welfare of a whole nation. The hell of 
public execration should have no corner too hot for 
such men. A flame of public indignation at such 
crimes against the life of the nation should drive them 
from social life. They are recreant to every duty of 
a citizen, recreant to their country, recreant to virtue, 
and recreant to honor itself. They are as clearly 
enemies of the Commonwealth as though they came 
with arms in their hands to attack and destroy it. 
Our country will never go down in the momentous 
sweep of battle ; but it will as surely die from corrup- 
tion as the moral law pervades the universe if these 
conditions continue to exist. In the midst of the 
whirlwind, now as in the olden days, is the voice of 
God ; the great soul of the universe is just. 

Another source of corruption is found in the fact 
that United States Senators and Representatives are 
themselves frequently owners of manufacturing in- 
terests which are largely affected by tariff legislation; 
and, notwithstanding the fact that these men are per- 



128 THE TARIFF AND THE TRUSTS 

sonally interested in the passage of a bill allowing 
them to mulct the American people, they deliberately 
vote upon such measures in the Senate and the House. 
Many an afflicted man or woman in raising a memo- 
rial to their dead have paid by reason of the tariflf a 
considerably increased price to a United States Sen- 
ator interested in quarries. Many a consumer in the 
purchase of clothing has paid another tribute to a 
member of the House of Representatives who is en- 
gaged in manufacturing. Many a Senator has voted 
upon tariff bills which imposed duties upon bituminous 
coal when he was directly interested in such coal mines 
and in connecting railways. Directly or indirectly 
about every Senator in the United States Senate is 
largely interested in manufacturing or mining or some 
other industry affected by the tariff. The United 
States Senators, as a rule, control the organization of 
their party in their respective states ; and the power of 
the party organization in the United States is such as 
is found in no other country in the world. It not only 
absolutely determines actual legislation, but it controls 
almost with despotic power the vast patronage of 
government. Privilege, patronage and protection are 
what make a United States Senator in these days all 
powerful. A monopoly which desires to have farmed 
out to it a part of the taxing power of government can 
afford to own a United States Senator in one of the 
smaller states ; and, by a combination of the owners of 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I29 

a few such Senators, the tariff can be increased, or a 
change in the law can be headed off, and all attempts to 
relieve the people absolutely thwarted. The total vote 
of Nevada a few years ago was only about ii,ooo. Mr. 
Stewart for a long time represented that small con- 
stituency in the United States Senate. When discus- 
sion over the duty on borax was before the Senate, it 
was claimed by those opposed to the duty that the 
Pacific Borax and Redwood Chemical Works was about 
to be sold to an English company, when Senator 
Stewart arose and said that he understood that "there 
had been an attempt to make this sale in Europe in good 
faith, but I think the whole matter fell through. It was 
one of the bombastic prospectuses that the English put 
out. It must be an exaggeration." Through recreancy 
to duty on the part of this United States Senator and 
upon the part of Senator Perkins and Senator White, 
of California, the outrageous duty upon borax was im- 
posed. But the wrong is not alone in United States 
Senators. The people themselves are in many cases 
corrupt. Senator Clark, of Montana, was able to 
control a majority of the Legislature in that state, and 
thus secured a seat in the United States Senate, where 
a unanimous report from the Committee on Elections 
found that his election was procured by bribery. 
However, he returned to Montana, and the Legisla- 
ture of that state, knowing that he had procured his 
prior election by the corrupt use of money, re-elected 
9 



130 THE TARIFF AND THE TRUSTS 

him, and to-day he sits in the United States Senate 
legislating upon many industries in which he is inter- 
ested; and the people of Montana are probably not 
ashamed of being represented by such a Senator. 

The control of the newspapers by special interests 
and trusts is a most dangerous result of protective 
tariffs. A great newspaper in one of our larger cities 
requires a large investment of money to organize it in 
the first place and a larger amount to continue it until 
it becomes self-sustaining. Many of the stockholders 
and directors of newspaper corporations are interested 
in manufacturing interests, and the policy of the 
paper is directed with reference to those interests. 
The newspaper makes its money from the proceeds of 
advertisements, and the industrial combinations ex- 
pend large sums of money in advertising. In national 
campaigns vast sums of money are expended in direct- 
ing and controlling the opinions of the press. The 
result is that many of our newspapers do not recognize 
the interests of any other class but the producing 
class. Times are prosperous, according to such 
papers, when the corporations are making money. We 
are developing rapidly when the millionaires are add- 
ing millions to their already large fortunes. The 
trust-controlled paper, instead of direct, courageous, 
helpful dealing with public questions, fills its columns 
with accounts of battles never fought, of things never 
done, and with the fleeting popular passion or sensa- 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I3I 

tion of the moment. Instead of pointing out the real 
cause of abuses, and seeking to have it removed, they 
attribute all abuses, however remote the cause, to the 
officials in power at the time, so that they can have 
some one prominently before the people to ''pound." 
These newspapers encourage the conditions which 
bring abuses, and then seek popular favor by attacking 
the abuses when they appear. They select men of 
straw to trample upon, announce platitudes with 
ponderous affectation of wisdom, and, as has been 
well said, assail with great vigor "The Czar, the 
Kaiser, and the Sultan, and sock it to all the satraps 
at a safe distance." But they carefully avoid vital, 
living public questions which lie at the foundation of 
the welfare and happiness of every humble home in 
the land. The remedy prescribed by such newspapers 
for evils is always a penal statute which they know, or 
ought to know, will never be enforced. The influence 
of this kind of newspaper, and often its deliberate In- 
tention, is simply to divert the attention of its readers 
from the real causes of public evils. 

The secondary forms of corruption which spring 
indirectly from protective tariffs are all-pervasive in 
American life. So successful have been the combina- 
tions of wealth and avarice in controlling national 
legislation that to-day few men think of striving for 
wealth in any great business adventure without either 
national or state aid in the form of special legislation. 



132 THE TARIFF AND THE TRUSTS 

Young men, in fact all classes of men, placing less 
confidence than in the olden times in industry and 
economy, turn their eyes to legislation as the sure 
source of wealth; and therefrom springs the feverish, 
speculative, unscrupulous spirit of the day which is 
sapping and destroying our fine young American man- 
hood. Once let it be fully accepted as a legitimate fea- 
ture of public policy that the great public power of tax- 
ation may be used for private purposes, and you cor- 
rupt the whole people, and turn their attention from 
procuring wealth through industry and economy to 
procuring it by legislation. 

Protective tariffs invariably result in an amount of 
revenue in excess of the needs of government, or, when 
the duties are so high as to greatly restrict importa- 
tion, in deficits in revenue. The tarifif of 1872, the 
tariff of 1883, and the tariff of 1890 were each oc- 
casioned by the accumulation of a great surplus over 
the necessities of government in the treasury. The 
McKinley Tariff of 1890 placed duties so high as to 
unduly obstruct importation and therefore reduce the 
income, and did not furnish sufficient funds for carry- 
ing on the government. There has been a consider- 
able deficiency under the present tariff to meet the ex- 
penses of government in the years 1904 and 1905. The 
result of all this has been frequent changes in the 
tariff, extravagant expenditure of money to get rid of. 
the surplus, anxiety and apprehension on the part of 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I33 

business interests fearing a revision of the tariff and 
all the demorahzation which comes from such condi- 
tions. The friends of protection are always the friends 
of the distribution of public money, and public ex- 
travagance is one of the most effectual means of 
destroying public virtue. Public extravagance in 
national matters has resulted from the fact that the 
surplus income must be disposed of in order to remove 
its existence as an objection to high tariffs. Twenty 
commodities like tea, coffee, etc., could be selected 
which would produce as much revenue as the present 
tariff and would not afford the frequent surplus call- 
ing for a change in the tariff. Indirect taxation 
through tariffs is a source of public extravagance and 
demoralization. Does any intelligent man believe for 
a moment that our annual pension list would have 
reached even $50,000,000, instead of $160,000,000, had 
it been necessary to raise the money devoted to that 
purpose by direct taxation? Would our representa- 
tives in Congress dare to multiply offices, approve 
thousands of unmeritorious private claims against 
government, enact wasteful river and harbor bills, and 
squander the public money if the national expenses had 
to be defrayed by an overt, irritating tax dragging the 
money directly from the citizen's pocket? The cost 
of the administration of the national government for 
the last four years, exclusive of all expenses in 
Panama, exceed those of the four prior years by the 



134 THE TARIFF AND THE TRUSTS 

extraordinary sum of $436,104,699. Bismarck, as it 
will appear in the chapter on German Tariffs, frankly 
gave, as the reason for changing the policy of 
Germany from direct to indirect taxation in 1879, 
that by such taxation the money of the people could 
be taken without their knowing it. It is the old story, 
but ever a true one, that government wishes to pluck 
the feathers from the goose with as little squawking 
as possible. 

A war between our own country and another coun- 
try would be a most prolific source of demoralizing 
our people, and wars are often the result of protective 
and retaliatory tariffs. Four years ago we decided, 
in the interests of the American sugar refiners, to levy 
a countervailing duty on Russian bounty-fed sugar. 
Russia retaliated by promptly levying high duties 
against our metal exports, reducing exportation large- 
ly, and this continued for two or three years. In 1888 
and 1889 a bitter tariff war existed between France 
and Italy, causing millions of loss to both countries. 
In 1893 another bitter tariff war continued for a con- 
siderable part of the year between France and Switzer- 
land, and in the same year a violent tariff war between 
Germany and Russia broke out, causing great loss to 
both countries. 

Another evil resulting from protective tariffs is the 
centralization of government. The acceptance of the 
protectionist idea that under the guise of law govern- 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE 1 35 

ment can delegate to private corporate interests the 
right to collect from the whole people a price for the 
necessaries of life beyond their competitive values is a 
perversion of the fundamental principles on which 
constitutional liberty rests. If a tariff bill were passed 
specifying its actual purposes, the courts would be 
forced to declare it unconstitutional. If you were to 
ask any man whether the legislature has any right to 
authorize him to put his hand into your pocket and 
take your money for his advantage, he would prompt- 
ly answer "No." Now, is it safe to place in the hands 
of government the right to permit a few men to sell 
their goods to the millions of consumers at a higher 
price than they otherwise could? Macaulay, speak- 
ing of Charles I, said, ''No man is fit to rule over a 
people who listens to the few who have access to him 
as against the many whom he will never see." He 
might have said, further, that no people ever wisely 
gave the right to government to favor the few who 
have access to it at the expense of the many whom its 
officials will never see. Such a power reposed in 
government is a danger to democratic government. 
Such a power in government is despotic in its very 
nature, and under its exercise government cannot but 
become more and more centralized. Such centraliza- 
tion has been the tendency in both state and national 
government in recent years. The Speaker of the House 
of Representatives usurps the legislative power of the 



136 THE TARIFF AND THE TRUSTS 

House. The committee upon rules in state and 
national Legislatures ties the hands of individual mem- 
bers, and all legislation in the last days of a session is 
practically dictated by two or three men. The House 
of Representatives, intended by the framers of the 
Constitution to reflect the will of the whole people, 
has lost its power and prestige. The Senate, com- 
posed of comparatively few Senators, elected in many 
instances through the corrupt use of money has be- 
come all-powerful. Local self-government in towns 
and cities is usurped by state legislatures. Abuses 
accustom men to rely upon the strong power of gov- 
ernment for a remedy and bring about a condition 
of paternalism that makes ''Little Fathers" of Presi- 
dents and bureaucratic government generally, such as 
Russia and Prussia present to the world to-day. 
Around ''Little Fathers" as Presidents is always gath- 
ered a bureaucracy. France, though enjoying repub- 
lican government in name, is just as bureaucratic as 
many monarchical governments in Europe. When a 
French peasant attempts to pay in money his share in 
the repair of a communal road instead of breaking the 
necessary amount of stone himself, no less than twelve 
functionaries must approve of such payment and no 
less than fifty-two different acts must be performed 
by them before it can be done. If centralization of 
government continues in state and national govern- 
ment with the rapidity that we have seen for the last 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I37 

twenty-five years, it will not be long before all the 
powers of localities will have been usurped by the 
state government, while many of the powers of the 
state will gradually be absorbed by the national gov- 
ernment. Our state will become as that of the Sultan 
of Turkey, where not a church nor a school nor a 
factory nor a mill nor a village road nor a bridge over 
a river can be built nor a book or newspaper printed 
without the examination of the question at Constan- 
tinople. Are the people awake to these dangers? Is 
not the remedy to find the cause of such abuses and re- 
move that cause, instead of making abuses and then 
authorizing the President, through inter-state com- 
merce commissions and other means, to remedy the 
abuses ? Once place in the hands of the President of the 
United States the power to control every corporation in 
this land, and you have placed in his hands a power that 
will surely destroy democratic government. If ever the 
day shall arrive when the people of the different states 
shall allow all their local affairs to be administered by 
state officials and when the states shall allow the pow- 
ers reserved to the states to be exercised by the central 
government, on that day this democratic Republic will 
be robbed of all that has made it of value and interest 
to mankind. 

The clearest expression of national strength is 
patriotism, and protectionism as developed in the 
United States is destructive of patriotism. The line 



138 THE TARIFF AND THE TRUSTS 

between public duty and private interests is always lost 
sight of in the making of protective tariffs. The 
protective tariff, while it brings from duties upon 
foreign imports upwards of $200,000,000 annually in- 
to the treasury, at the same time permits the producers 
of tariff-protected articles to sell their goods to the 
American people for at least a billion dollars annually 
more than they would receive were it not for the tariff. 
A law whose chief effect is to bring a billion dollars of 
money into the pockets of private individuals does not 
inspire patriotism in the people. Shoddy clothing for 
which the citizen has to pay twice as much at home as 
the Englishman has to pay for woolen clothing, em- 
balmed beef sold by the beef trusts to the government 
for our soldiers, corruption in the general government 
in about all the cases where recent investigation has 
been made, increased taxation to support those birds 
of prey, the politicians, the voting by Representatives 
in Congress of mileage to their homes and return dur- 
ing a constructive recess of Congress when they had 
never traveled a single mile, the sight of vast wealth 
enthroning itself in the United States Senate and voting 
tariff benefits for industries owned by its own mem- 
bers, all these abuses have been tending to make the 
individual citizen feel that life is but a scramble for 
governmental benefits and that patriotism is but a 
mask for hypocrisy. Are there not evidences on 
every side that the spirit of patriotism is dying out 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE 1 39 

among our people? It has been found necessary for 
the Legislatures of twenty-six different states in the 
Union to prohibit the use of the Stars and Stripes as 
a means of advertising the commodities of merchants 
and manufacturers, and so fully have some of our 
courts absorbed this materialism that they regard 
property as more sacred than the flag of our country. 
The highest Appellate Court in two of the leading 
states of the Union has recently held that the prohi- 
bition of such use of the flag by an act of the state 
Legislature is unconstitutional. In one of the cases at 
the time the act was passed the cigar manufacturer, 
who afterwards became defendant in the criminal pro- 
ceedings, had on hand a few cigar boxes with the Stars 
and Stripes carried by a military squad under the title, 
"Color-Bearer," printed thereon. The learned Judges 
in the higher Court all agreed that, because the defend- 
ant was the owner of these cigar boxes with this 
label thereon at the time the act was passed, the por- 
tion of the act applying thereto was unconstitutional in 
that it deprived him of his property without due process 
of law. If you wish a striking example of the decay 
of patriotism in our country, observe, when crossing 
the Atlantic on one of our national holidays, the strug- 
gle of our people to sing ''America'' or 'The Star 
Spangled Banner." It was the spirit of patriotism in 
the bosom of every soldier of Japan in the late war 
that carried the Japanese arms to triumph. It is that 



I40 THE TARIFF AND THE TRUSTS 

spirit largely that preserves the liberties of Switzer- 
land. The poor peasants of Unterwalden gave their 
lives for liberty upon their mountains, the great nobles 
of Venice clung to their lives and to their gold. 

Finally, let us inquire how protective tariffs have 
affected the civic virtue of the beneficiaries of the 
tariff. When any man, be he manufacturer or in any 
other business, commences to sleep on a full stomach 
stuffed with his neighbor's share, at that moment he 
commences to die morally. This is true of nations as 
well as individuals. The Assyrians plundered all 
Asia Minor for seven hundred years, and brought 
their wealth to Nineveh only to die through the luxury 
purchased by their ill-gotten gains. Babylon followed 
their example, and scientific men have been digging 
for the last half-century to find the palaces, the hang- 
ing gardens and the great walls which were built with 
the plunder of nations. The Median Empire lived less 
than a century, and died as a result of its lust of con- 
quest. The Persian, Parthian, and Roman Empires 
followed in the footsteps of the others, and went down 
to destruction as the result of the curse which attaches 
to plundered wealth. Spain robbed the Western 
world, and, shorn of all her possessions, now lies 
decrepit and helpless. No man can get from govern- 
ment what he is not entitled to for any considerable 
period of time without losing a sense of justice, if in- 
deed he ever possessed it. Do you doubt this ? Read 



' PROTECTIVE TARIFFS AND PUBLIC VIRTUE I4I 

the testimony of the men connected with the insurance 
scandals in New York, about all of whom are con- 
nected very closely with the industries of the country. 
They do not know evil when they see it. They did not 
even seem to appreciate that a trustee could not use 
trust funds for his profit. Men cannot traffic in the 
honor of other men without losing their own honor. 
Men cannot give money to campaign committees with 
the implied agreement that they shall receive a return 
therefor through tariff legislation and keep their self- 
respect. Before the Industrial Commission on De- 
cember 18, 1900, came George V. Cresson, at that 
time President of the Manufacturers' Club in Phil- 
adelphia. Mr. Cresson for forty years had been en- 
gaged on a large scale in the manufacturing of ma- 
chinery and its sale all over the world. A careful ex- 
amination of his testimony indicates the elevation of 
his character. Honored by the club of which he was 
president, respected generally in business, a manu- 
facturer himself, his opinion of how protective tarififs 
are procured and how they affect the men who pro- 
cure them is of value. He was asked : 

"Q. If the tariff could be amended in a few 
''respects from time to time as might be suggested 
**by economic changes, without being generally revised, 
"and if the same policy of tariff could be preserved, 
''would legislation of that sort injure business? — A. I 
"understand you to say that if the changes were made 
"gradually ? 



142 THE TARIFF AND THE TRUSTS 

''Q. Yes; from time to time as economic changes 
''suggest? — A. Yes; my opinion is that is the only 
''way to do it ; I do not beHeve there is any other way 
"to do it and do it properly. I have advocated, and 
"felt more and more for years that the sooner we get 
"at that thing the better. As I understand the way the 
"tariff is altered now, a large number of manufacturers 
"go down to Washington and advocate their special, 
"particular business and try to get the tariflf placed as 
"high as possible on it. I do not think it is of any 
"advantage to them. I know it would not be in our 
"business. As far as we are concerned personally, we 
"are not at all affected by the tariff. You might say 
"we are affected indirectly by the way it affects our 
"customers. For instance, the wool man, if he has his 
"business stopped, cannot order any of our goods ; the 
"cotton man the same way, and so on. Now, in case 
"there is a certain amount of leeway given that man 
"to understand what is going to happen, he can pro- 
"vide a way to arrange his business; but if the thing 
"comes on with a crash, it leaves him in the air, so to 
"speak, and he does not know what to do. That is the 
"effect of this incessant figuring with the tariff in a 
"large way. I believe, as far as I can see the matter, 
"that there have been a great many more changes in 
"certain things in the tariff than there has been any 
"business necessity for. I am not at all an advocate 
"of a high tariff. I think that as low a tariff as we 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I43 

^'can get along with, affording a fair profit, is what the 
"manufacturers of this country will prosper under. 

"Q. You believe in having it protective, but not un- 
"duly protective? — A. No; I do not believe anybody 
"should have the advantage in that way. It creates a 
"bad condition of affairs in regard to the enormous 
"amount of money a man makes at one time, and when 
"that is all cut off he has been demoralized by that 
"operation. He gets in the habit of spending more 
"money than he did and than he ought to, and is apt to 
"lose his business entirely. I have known of many in- 
"stances of it. I have seen it in this club ; where men 
"used to spend thousands of dollars they cannot now 
"spend so many pennies. A good many have left here 
"because of their being absolutely without means. 
"Some of the principal men here when I first came to 
"this club have suffered in that way, and I mention 
"this simply as being a typical place where we see the 
"different kinds of manufacturers. 

"Q. (By Mr. Farquhar.) Do you know of any 
"way of amending: the tariff without opening the whole 
"tariff schedule? — A. The only way I could answer 
"that question would be this: If I find a part of my 
"business does not pay, I make it pay. If there is too 
"much tariff on one thing, why not have it changed so 
"as to be within bounds and be reasonable? 

"Q. But do you not know the whole tariff is sub- 
"ject to amendment the minute you take it up to amend 



144 THE TARIFF AND THE TRUSTS 

^one paragraph? — A. That is a legal point I do not 
'know anything about, but I think it is a very bad 
'thing if it is so. 

*'Q. Your opinion is that we should take the whole 
'tariff question out of politics ? — A. I think it should 
'be made a business question. 

"Q. You would place it in such a body as the 
'British Board of Trade, where they could make 
'changes to fit conditions? — A. The British have al- 
'ways had the advantage over us in that way." 

Mr. Cresson, with ripe experience and wide obser- 
vation of men, seems to think that protective tariffs 
ruin men, and he tells us he has known many instances 
of that kind. Every man of business knows such in- 
stances. The moral law of the universe is against in- 
justice, and the luxury which ill-gotten wealth affords 
more often brings woe than happiness. All history 
verifies this. Sybaris, Rome, Antioch, and Venice, 
each are instances where wealth and luxury destroyed 
private and public virtue. We all recall the fate of 
that little group of Italian States whose political in- 
stitutions were wrecked by the greed of a few men, 
and whose public freedom vanished before the breath 
of commercial ambitions on the part of their petty 
rulers. The effect of acquiring wealth by injustice is 
seen in the men at the head of our great commercial 
combinations. Do they take an interest in public 
affairs? Are they willing to make sacrifices for the 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I4S 

public welfare? In England men in the same walks 
of life frequently give years of time to Parliament and 
public life without receiving a dollar of recompense 
for their services. Here this class of men avoid public 
life except to procure unjust laws allowing them to 
fleece their fellow-countrymen. But they do make 
what they regard as atonement for such conduct. 
They give freely to charitable purposes. The sense of 
religious rapture over mercies received on the stock 
exchange are said to bring many offerings of great 
beauty to the altar, and the sense of thankfulness for 
unjust enrichment seems to result in a flood of chari- 
table gifts. If history has any lesson clearly written, it 
is that the rapid accumulation of wealth through in- 
justice is always accompanied by a generous distribu- 
tion of the same to the poor. The reign of Augustus 
and the reign of Constantine were marked with just 
such liberality as exists to-day. '3ut Augustus found 
Rome free and left it a slave. In the reign of Con- 
stantine commenced that distribution of wealth which 
transferred to monasteries and churches a considerable 
proportion of the riches of the world. The greater 
part of the works of charity have been a curse to those 
receiving the alleged benefits. What we need is not 
charity but justice. Justice is the highest charity, for 
it substitutes equal opportunity, fair play and certainty 
for the chance operation of philanthropy. 

There are, however, indications of a better day. Be- 
10 



146 THE TARIFF AND THE TRUSTS 

fore the Civil War the question of the existence of 
slavery and its injustice was one avoided by Southern 
members of the Senate and the House of Representa- 
tives. Human slavery was so thoroughly inconsistent 
with our form of government as to mak# mention 
thereof a source of pain, and so members of Congress 
from the North as well as the South were silent. The 
cruel injustice of the trusts to consumers has created a 
tender spot in the conscience of every protectionist in 
Congress. He does not like to discuss the question. 
When the bill to remove duties upon imports of build- 
ing material for San Francisco was recently before the 
House of Representatives it was passed with little dis- 
cussion, because protectionists feared a tariff debate, 
and the dread of the striking object-lesson which must 
result from such legislation. These men admit the 
weakness of their case by the fear of discussion. When 
an evil gets so bad that men dare not discuss it the 
end is approaching. In the Hall of Eblis every man 
ran round and round holding his hand over an incur- 
able sore and all agreeing not to mention it. Will the 
people consent that it shall not be mentioned? Are 
they going to be cheated much farther with the empty 
forms of liberty when the spirit has fled. The event is 
with them. If their virtue is impaired, the result hangs 
trembling in the balance. Those who live under a 
representative form of government must rise morally 
or they will sink politically. We cannot measure 



PROTECTIVE TARIFFS AND PUBLIC VIRTUE I47 

justice by expediency, we cannot sell our souls to 
materialism, we cannot fold our arms in sleep and sur- 
render to the greed of unscrupulous wealth and still 
preserve free government in its integrity. We may 
give credent ear to the flattery of demagogues, we may 
console ourselves with the hope that things are not as 
bad as they really seem, we may deceive ourselves with 
the forms of free government long after the spirit of 
liberty has fled ; but if we are to preserve free govern- 
ment and to act worthily of those who laid its founda- 
tions in prayers and in blood, we must emulate them 
in their hatred of injustice and extortion. 



CHAPTER V 

A TALK WITH MANUFACTURERS 

It will take men a weary while to believe in the in- 
justice of any system that puts gold into their purses. 
Because of this I do not address myself to the owners 
of the United States Steel Corporation, nor to the 
other monopolies which control the supply of raw 
material, but rather to you, tens of thousands of manu- 
facturers, who use in your factories raw material, such 
as pig iron, steel blooms, billets, coal, wool, hides, 
leather, lumber, lead, or chemicals. If I can satisfy 
you that the tariff not only puts no gold into your 
purses, but actually takes it out, you surely cannot say 
that in denouncing our existing tariff I am opposing 
your interests. 

Never in the history of our country has there been 
a time so critical for manufacturers and exporters as 
the present. Upon our action for the next twenty 
years as regards the imposition of duties on raw ma- 
terials depends our ability to seize the greatest op- 
portunity ever presented to any people for industrial 
primacy. Let me call your attention to the existing 
conditions. Our country is situate midway between 

148 



A TALK WITH MANUFACTURERS I49 

Europe and eastern Asia. Japan holds aloft the light 
which is to guide China, Corea, Manchuria and the 
islands of the Pacific and Indian Oceans to a higher 
civilization. Japan, China and all the Eastern coun- 
tries have unlimited deposits of the raw material of 
manufacturing. Can there be any doubt about the 
wisdom of exchanging our highly manufactured arti- 
cles, made in great part by automatic machinery, for 
the raw materials and hand-made products of Asia? 
Such an exchange means more work for our people al- 
ready becoming overcrowded. Such a vent for our 
manufactured product will give stability to our manu- 
factures which they do not now possess. I am aware 
that the imports to China and the islands of the Pacific 
are now comparatively small, and our trade with them 
when compared with European countries is really in- 
significant; but within the next fifty years a revolu- 
tion in their industrial life must take place. Railroads 
will be built, mines will be opened, waterways will be 
improved, European customs will be adopted and com- 
merce between these countries and the existing in- 
dustrial world will multiply many fold. Our vast 
natural resources of iron and other raw materials 
which are the foundation of successful industry, and 
without which it cannot long continue, are the great- 
est of any country in the world. We produce more 
coal, iron ore, pig iron, steel, copper, lead, borax, 
petroleum, cotton, wheat, corn, oats, and cattle than 



150 THE TARIFF AND THE TRUSTS 

any other people in the world. Our people are the 
most energetic in the world, using machinery in manu- 
facturing to an extent elsewhere unknown. Our 
manufacturers are able to adjust themselves to new 
conditions more easily than any in the world. No 
people have ever carried on such gigantic schemes of 
internal commerce and transportation as ours. Our 
workmen are free from the routine spirit common to 
European workmen and have no prejudices against 
the employment of machinery so common in Eng- 
land. Our capitalists are the boldest and most enter- 
prising, and we are and will continue to be the most 
inventive people in the world. Edison leads all the 
inventors of the world, having given us 784 patents 
up to 1904. The people of the little State of Connecti- 
cut probably have made more inventions than the peo- 
ple of all Russia. 

Now what prevents our taking the leadership as ex- 
porters? It is our antiquated tariff, which for forty 
years has imposed a higher duty upon imports than 
that of any other country in the world. It is so un- 
scientific in its nature as to impose duties upon coal, 
iron ore, pig iron, steel, wool, lead, sugar, lumber, 
hides, wood-pulp, chemicals, and about every other raw 
material which you manufacturers use. In such a 
contest as you are about to undertake every burden up- 
on your raw material should be removed. Your com- 
petitors in Great Britain and Germany have consider- 



A TALK WITH MANUFACTURERS I5I 

able advantage of you in the cheapness of their machin- 
ery and plants, and every particle of raw material 
which goes into their manufactured product is abso- 
lutely free from any burden. You would be able, by 
your energy and your use of machinery, to lead the 
world in manufacturing in a fair contest, but we put 
burdens upon every particle of your raw material and 
ask you, thus handicapped, to capture the markets of 
the world. Our protective tariff simply penalizes all 
production and all exportation by imposing duties up- 
on raw materials. Thousands of you, employing 
hundreds of thousands of workmen, are engaged in 
building locomotives, cars, carriages, hydraulic ma- 
chinery, dynamos, automobiles, agricultural ma- 
chinery, and other machines and tools, and every- 
thing that enters into the manufacture of your 
product is increased in cost by nearly the amount 
of the duty on your raw material. You can manu- 
facture in eight months sufficient to satisfy the wants 
of our people, and you must either over-produce and 
bring about stagnation or else find other markets in 
which to sell your products. The obstacles to your 
success is that every stick of timber in the building of 
your plant, every piece of your machinery, every ton of 
coal, every piece of iron or steel or lead you use is in- 
creased in price because of the tariff. More than a 
third of all our imports is raw material, and the duty 
imposed not only affects the price of these imported 



152 THE TARIFF AND THE TRUSTS 

articles but, as you well know, enables the trust, after 
it has destroyed domestic competition, to raise the 
price of the like domestic raw material up to the duty 
line. There is annually a tax of at least $600,000,000 
upon your raw materials through the agency of the 
tariff. Do away with this tax, and by the aid of your 
machinery and your intelligent labor you could man- 
ufacture so cheaply that you could wrest from Great 
Britain and Germany the neutral markets of the world. 
While you practice economy of effort in all the daily 
actions of your industrial life, buying as cheaply as 
possible, saving a dollar here and a dollar there, you 
allow a system to continue which makes your economy 
of little avail when you seek to become a producer for 
the world. Not only do these iron masters make you 
pay tribute upon every ton of your raw material, but 
they dump their pig iron, crude steel, and partially 
manufactured products into foreign markets at lower 
prices than they sell to you, and the Englishman and 
German, getting their raw material at reduced prices, 
can undersell you in the markets of the world. It is 
sound public policy to send abroad highly manufactured 
goods, since thereby you exchange the products of 
skilled labor for the cheap labor used in procuring your 
raw material. Do not public policy and justice re- 
quire that the men who control the United States Steel 
Corporation, the Sole Leather Trust, the Lead Trust, 
the chemicals and the fibrous matter of your manu- 



A TALK WITH MANUFACTURERS 153 

factiires, should sell their products to you at the same 
prices for which they sell them in European countries 
and allow you to compete fairly with the foreigner 
rather than to give him the unfair advantage of lower 
cost of raw material? The trusts are simply discrim- 
inating against their home manufacturers whenever 
they sell their products abroad at lower prices than 
they sell them at home. How can you compete in the 
markets of China and the East or in the markets of 
South America with the manufacturers of Great 
Britain and Germany when they build their plants from 
untaxed lumber, dye their clothes with untaxed dyes, 
create their steam from untaxed coal, make their 
hardware and tools from untaxed pig iron, and make 
their cloth from untaxed wool? 

Duties imposed upon raw materials restrict your 
choice of materials and therefore injure you in ad- 
justing your manufacturing to the demands of foreign 
markets. To be successful you need free scope in 
your choice. Again, a tax on coal means a tax on 
steam and indirectly a tax on iron, since it takes a 
considerable amount of coal to make a ton of iron. 
A tax on iron means a tax on machinery, railways, 
buildings, and tools ; and the effect of all these multiple 
taxes measured in the finished products and of the 
profits upon them at each stage can only be imagined, 
they cannot be measured. You will understand what 
I mean by raw material. In strict sense there is no 



154 THE TARIFF AND THE TRUSTS 

such thing as raw material. The finished product of 
one producer is the raw material of the other, and the 
greater number of hands through which it passes the 
more costly it becomes to you. The tax accumulates 
in the successive stages, and each person through 
whose hands it goes takes his profits on its value in- 
creased by the duty. By the time it reaches you it 
has become so high that both you and your laborers 
must suflfer by the decreased profits that come from 
costly raw material. All the manufacturing countries 
of Europe depending to any extent upon exporting 
have recognized the wisdom of putting raw materials 
upon the free list. In Germany's recent tariff you 
will find the raw materials about which I have spoken 
on the free list, and competition with her exporters, 
or competition in their own markets cannot be carried 
on by our people unless we also recognize that the raw 
materials of manufacturing ought to be obtained as 
cheaply as possible. 

The ablest of our own manufacturers and of the 
manufacturers abroad appreciate this principle. Let 
me give you a few illustrations. John B. Sargent, of 
New Haven, is the head of a firm carrying on one 
of the largest manufactories of hardware in the world. 
Probably no man connected with manufacturing in 
our country has traveled more widely or studied 
economic questions more carefully than Mr. Sargent. 
Speaking of the matter of cheap raw materials in 



A TALK WITH MANUFACTURERS 1 55 

1894, he said: ''We export to Australian, South Afri- 
"can, and South American countries, as well as to our 
''nearer neighbors, any goods that we manufacture 
''in good quantities in which labor is a large element 
''of cost and protected materials a small element of 
''cost. For instance, we supply those countries quite 
"largely, certainly averaging fully half they use, with 
"carpenters' tools of good quality and finish, such 
"as polished chisels of all styles, auger and auger 
"bits and other boring tools ; with iron planes, drawing 
"knives, etc. ; with nearly all the axes they use ; all car- 
"penters' hammers; machinists' hammers, blacksmiths' 
"fine finished hand hammers, etc., the forging and finish 
"of which is a large proportion of the cost and the 
"tarifif-taxed steel a small part of the cost. But we can- 
"not export a sledge hammer, nor an anvil, nor a heavy 
"iron chain. And what is worse, by not being able 
"to furnish the coarsely made and heavy goods, we 
"thereby fail in many cases to secure orders for the 
"higher grade goods. . . . We supply Australian 
"countries with nearly all their better grade of stoves 
"with smooth castings and well finished with nickel 
"plated trimmings, but they all get their coarsely cast 
"and heavy stoves with little finish from England." 
Mr. Sargent goes on to enumerate many other articles 
requiring highly skilled and highly paid labor but 
small amounts of steel and iron which are exported 
by his and other firms. But in all products where 



156 THE TARIFF AND THE TRUSTS 

much iron and steel is used they were unable to com- 
pete with foreign countries because of the high price 
of their raw material. Mr. Sargent says : ''Our labor 
is really the cheapest in the world, because now, as 
then, it is paid more; but it produces more, so that 
the labor cost of production is less here than in foreign 
countries. Indeed, the articles which we most excel 
in producing are those in which the proportion of 
labor is comparatively large and material small, like 
machinery and shelf hardware ; while we find it harder 
to compete with articles requiring less labor and more 
materials like anvils." 

Mr. A. B. Farquhar, President of the A. B. 
Farquhar Company, Limited, manufacturers and ex- 
porters of agricultural machinery, York, Pennsyl- 
vania, in a letter addressed to the Ways and Means 
Committee of the House of Representatives in 1897, 
says : ''Some years ago I visited a large agricultural 
implement factory in England at the invitation of its 
owner, a member of Parliament. I found plow 
handles and beams produced in that factory at a labor 
cost of more than a dollar, while similar work cost us 
but ID cents in our factory in York, owing to our 
superior machinery and methods. So that our cheap- 
er labor at considerably higher wages fully made up 
for the disadvantages at which we were put by the 
greater cost of raw material. I then and there told 
the proprietor that the trade would all come to us un- 



A TALK WITH MANUFACTURERS 157 

less he improved his methods; and, to make a long 
story short, it has all come to us/' 

We impose duties amounting to about 52 per cent, 
upon wool, and then, to compensate for this duty and 
to give additional protection to the manufacturers of 
woolen goods, we impose a duty of about 100 per 
cent, upon the finished product. No other country in 
the world to-day, so far as I can ascertain, imposes 
duties upon wool. We alone of all the people are 
willing to confine our manufactured woolen goods to 
our own country by putting such a duty upon the raw 
material as makes it impossible for us to export in any 
considerable amount. Exports of manufactures of 
wool from the United States in the calendar year 1903 
were only $2,002,913 in value. The exports from 
Great Britain during the same twelve months were 
valued at $123,5/14,847. The contrast between these 
two amounts affords a striking commentary on the im- 
potence of the United States and the eminence of 
Great Britain in the foreign markets as the result of 
the pursuit of two diametrically opposite tarifif policies. 
But this is not the worst. Our manufacturers of car- 
pets have shown wonderful ability in conceiving beau- 
tiful designs, and our inventors have given us the best 
looms and other machinery for their manufacture 
known in the world. We do not produce carpet wools. 
They come largely from Australia and South America 
and some European and Asiatic countries. The 



158 THE TARIFF AND THE TRUSTS 

Dingley Law imposed 4 cents per pound on carpet 
wools costing less than 12 cents, and 7 cents per 
pound on carpet wools costing more than 12 cents. 
The exportation of carpets has steadily decreased 
since the passage of that bill. 

It is said by experts that the building of a cotton mill 
with 100,000 spindles in the United States costs 
$1,250,000; but in England, because of the cheapness 
of raw material, only one-half the sum. You who 
manufacture unbleached cloths can compete with the 
world because you get your raw materials free; but 
when you come to prints, lawns, and ginghams, the 
contest is harder, because the dyes and other chemicals 
which you use are increased in price by the tariff, and 
you are more or less handicapped thereby in competi- 
tion abroad. 

We are the greatest producers of lead in the world, 
and the lead trust for some years has been selling its 
lead in London for a dollar less per hundred pounds 
than in New York, yet lead enters into the manufacture 
of glass, lamp chimneys, and many other branches of 
manufacturing and building. In other branches we 
use borax, linseed oil, white lead, and hundreds of 
chemicals, yet our government, by high tariffs, allows 
men like the late William Whiteman, of Philadelphia, 
and a firm in St. Louis, and another in New York, to 
form combinations and mulct you to the amount of at 
least fifty per cent, of the cost price for dye stuffs and 



A TALK WITH MANUFACTURERS 159 

almost every kind of chemical used in your manu- 
facturing. 

We have in this country upwards of ten thousand 
flour mills in thirty leading milling states. Minne- 
sota ranks first in the list of milling states, considerably 
upwards of a hundred million bushels of wheat being 
turned into flour in that state in a year. We are the 
greatest exporters of flour in the world, and but for 
our exports of flour, grain, and wheat we would cut a 
sorry figure in the exporting world. The business of 
manufacturing flour from wheat could be extended 
almost indefinitely in the state of Minnesota. Now 
let us see what the tariflf, by imposing heavy duties on 
the imports of other countries, does to encourage mill- 
ing. Belgium, Holland, France, and Germany have 
retaliated and imposed either prohibitory or excessive- 
ly high duties upon the imports of our flour. For 
years we have paid the maximum tariff duty in France. 
This is not all, the cost of the miller's plant and ma- 
chinery is greatly enhanced by the duties upon lumber 
and iron. By imposing a duty of 25 cents a bushel up- 
on the imports of wheat we have shut out from the 
great flouring mills of Minnesota the vast wheat supply 
of Manitoba, Saskatchewan, Assiniboia, and Alberta, 
for the American railways cannot bring it to Minne- 
apolis for the millers to grind because of the difficulty 
to trace it in bond and so obtain the rebates. The re- 
sult will be that American millers by the hundreds will 



l6o THE TARIFF AND THE TRUSTS 

eventually establish their mills in Canada unless this 
unreasonable duty is removed. The duty does not 
benefit the American farmer a farthing, for he is the 
greatest exporter of wheat in the world, and the duty is 
imposed only to allow unscrupulous demagogues to 
deceive him with the statement that his products are 
highly protected. 

The Canadian Dominion extends nearly 4,000 miles 
along our northern border. On both sides of this line 
are English-speaking people who, except in Quebec, 
enjoy the same English Common Law and have the 
same traditions, history, and aspirations. Our great 
prosperity has come from the fact that through three 
million and a half square miles of territory the people 
of over fifty states and territories can exchange their 
commodities with perfect freedom and to their mutual 
benefit. Yet, in face of this fact, we have erected an 
artificial barrier to all trade with the Canadians, and 
that, too, to our own detriment. The Dominion of 
Canada has an unbroken stretch of white pine and 
spruce extending from the east of Labrador to the 
Pacific Ocean. But our great statesmen stimulate 
the destruction of the American forests by protection 
upon lumber and wood-pulp and hasten the day when 
the last white pine tree shall be cut and the last spruce 
tree be ground into wood-pulp. The industries of our 
New England people are languishing. Within the 
New England states there are no considerable deposits 



A TALK WITH MANUFACTURERS l6l 

of iron and no deposits of coal. Close by, in Nova 
Scotia and in other Canadian provinces, are vast sup- 
plies of iron and coal, of easy access from the seashore 
and within the radius of cheap transportation to Port- 
land and Boston. Yet this great body of people, clam- 
oring for free coal and free iron ore, are denied the 
right to procure these raw materials to facilitate their 
manufacturing. 

After twenty-five years of free hides the Dingley 
Tariff imposed a duty of 15 per cent, upon cattle hides. 
This duty was imposed despite the protests of the 
boot and shoe manufacturers. Its only value is to 
the great meat trust which purchases its stock on the 
basis of meats and not of hides. In connection with 
this duty a duty of 20 per cent, is imposed upon im- 
ported sole leather, and these two duties not only put 
an increased price upon every pair of boots and shoes, 
but an increased price upon every piece of leather used 
by saddlers and manufacturers. The sole leather in- 
dustry is controlled by a trust. It is understood that 
the promoters of this trust are connected with the 
cattle-slaughtering interests, and have been for some 
time getting control of the tanneries and leather-pro- 
ducing industries of the country. Our boot and shoe 
industry employs the most intelligent labor with the 
best results of any manufacturing business in the 
United States. This business is the best evidence which 
the United States presents to the world to-day of the 
II 



l62 THE TARIFF AND THE TRUSTS 

advantage of labor-saving machinery and of the ex- 
treme speciaHzation or subdivision of labor. With- 
out these duties we could manufacture the boots and 
shoes of the world, because we use the most efficient 
machinery in their manufacture. Mr. John T. Day, 
editor of the Shoe and Leather Record in England, 
who recently wrote an article upon the boot and shoe 
trade of England for a volume entitled ''British Indus- 
tries Under Free Trade," says that the revolution in 
the making of shoes was brought about by the McKay 
Sole-Sewer, and that the result of this invention turned 
every Yankee inventor's attention to shoe-making 
machinery as the easiest way to fame and fortune. 
Mr. Day says : ^Tn a brief sketch it is impossible to 
"enter far into detail, though much of it would be both 
'^interesting and instructive. It is enough to say that 
''the play of circumstances brought it to pass that by 
"1890, or perhaps a little earlier, the factories of the 
"Eastern states were so much better equipped than 
"ours that the American boot manufacturer had the 
"British market at his mercy, but he did not know 
"it. Until about 1894 the American manufacturer 
"held very strongly to the view that he was only 
"able to keep his domestic market to himself by 
"maintaining a high tariff. When it was imposed 
"he was told that it was for the purpose of keep- 
"ing out the products of the 'pauper labor of Europe.' 
"He was quite curiously unaware that in the course of 



A TALK WITH MANUFACTURERS I63 

"about thirty years he had so improved his methods 
''of manufacture that his productive labor was costing 
''him in some cases less per dozen by fifty per cent, 
"than it was costing the British shoe manufacturer for 
"the same work. And yet the American boot operative 
"was earning £3 a week, against 30s. for a similar man 
"in Leicester or Northampton. And in the case of 
"female labor the disparity was even more marked. 
"I give these figures broadly as the result of a most 
"careful personal investigation which I made in 189 1 
"when I visited the United States for the express pur- 
"pose of investigating labor cost in American shoe 
"factories." The men who by protective tariffs upon 
raw materials cripple such industries as the making 
of boots and shoes in this country know as much 
about economic science as a gorilla knows about a 
steam engine. Here is an industry which has never 
been controlled by a trust and which can supply the 
world with boots and shoes. The average price of 
labor in this industry is the highest of any industry in 
Massachusetts. The operatives are, I am told, of the 
highest average intelligence found in any industry in 
the United States. It is an exporting industry which 
cannot be aided by a protective tariff without the ex- 
istence of a trust, yet Congress imposes a duty upon 
hides and sole leather, and puts just that much more 
burden upon its ability to export its products. 

The French Republic in 1892 passed a tariff with 



164 THE TARIFF AND THE TRUSTS 

maximum and minimum duties. The part of the tariff 
with maximum duties is known as the general tariff, 
and the part with the minimum duties is known as the 
conventional tariff. Upon 654 items of our exports 
to France maximum duties were being paid. Upon 
705 articles exported to us by the French our Dingley 
Tariff- imposed duties much higher even than the max- 
imum duties imposed upon our exports to France. 
President McKinley appointed the Hon. John A. Kas- 
son, who had previously been upon the Ways and Means 
Committee in the House of Representatives and who 
had a large acquaintance with the facts concerning 
our exports and imports, to negotiate a reciprocal treaty 
with France. The French Republic offered an average 
reduction of 48 per cent, on 635 items of our exports, 
leaving but 19 unaffected, in return for our offer of an 
average reduction of less than 7 per cent, on 126 items 
out of 705 named in the Dingley Tariff. It was es- 
timated that this treaty would have increased our ex- 
ports to France from twenty-five to thirty million dol- 
lars yearly. The most important concessions made by 
our country was on cotton knit goods, reduced from 
64 to 51^ per cent., and on cheap imitation jewelry, 
reduced 5 or 10 per cent. ; while French silk was ad- 
mitted at 55 instead of 60 per cent. duty. Every one 
of your industries would have been benefited by this 
treaty. No rational reason can exist why the Senate 
did not approve it. But the bogus jewelry men made 



A TALK WITH MANUFACTURERS l6S 

a great cry against it, the novelty works in Providence 
and Attleboro appealed to Senator Aldrich, the 
hosiery interests of Cohoes and Amsterdam declared 
that they would be ruined, and the interests of the whole 
manufacturing country and of the whole American 
people were sacrificed for these petty special interests. 
Senator Elkins, of West Virginia, said: ^'I shall fight 
these treaties to the bitter end. They are wrong in 
principle and ruinous in practice. The Republican 
party made a mistake in suggesting reciprocity in its 
platform and in enacting a reciprocity law." Senator 
Aldrich, of Rhode Island, moved that the matter be 
referred to the Finance Committee, and the French 
treaty was never allowed even to come to a vote. 

Now, let me give you one other instance in a foreign 
country of what free raw material will accomplish. 
About the last of the English duties on imports to be 
repealed was the sugar duty. The West India sugar 
plantations were owned by powerful interests in Eng- 
land, and the sugar duty was maintained for many 
years upon the plea that the West India planters pro- 
duced their sugar with free labor while the Cubans 
and Brazilians produced theirs by slave labor, and good 
Englishmen had conscientious scruples about eating 
sugar produced by slave labor. Among our English- 
speaking people we must all admit that there is a heap 
of cant. Mr. Dooley, writing "On the French Char- 
acter," represents the Frenchmen as safely settled 



l66 THE TARIFF AND THE TRUSTS 

down in Fashoda. ''In th' fr-ront dure comes th' 
Englishman with a coon king on ayether ar-rm that's 
jus' loaned him their kingdoms on a promissory note, 
and discovers th' Fr-rinchman emargin' frim th' roons 
iv th' safe. 'What ar're ye doin' here?' says th' 
Englishman. 'Robbin' th' naygurs/ says th' Fr-rinch- 
man, bein' truthful as well as polite. 'Wicked man/ 
says th' Englishman. 'What ar-re ye doin' here?' 
says th' Fr-rinchman. 'Improvin' the morals iv th' 
inhabitants/ says th' Englishman." The free admis- 
sion of sugar to the English markets had an effect up- 
on good morals of even more importance than the sup- 
pression of the slave trade in Cuba and Brazil. France, 
Germany, Austria and other European countries for 
about twenty years prior to 1902 gave bounties to their 
private sugar raisers upon their exports of sugar. The 
result was that great quantities of sugar found its way 
into England and was sold at half the current price of 
sugar in the United States. The Englishmen im- 
proved the opportunity. Before the Corn Law was re- 
pealed the people of England consumed seventeen 
pounds of sugar per head, in 1890 they consumed 
seventy pounds per head, and the consumption grew 
until it was eighty-six pounds per head, compared with 
twenty-five pounds in France, and about sixty pounds 
in the United States. But that is not all. With the 
introduction of free sugar there was a wonderful in- 
crease in the amount of confectionery, biscuit, jam. 



A TALK WITH MANUFACTURERS 167 

marmalades, and sweet drinks. Mechanical genius 
and enterprise turned out machinery for the making 
of these sweets which hitherto had been undreamt of. 
The cost of labor in producing a ton of cheap confec- 
tionery was about 20s., whereas in the early days it 
was nearly ten times that amount. England had free 
tin plate, and improved the opportunity which it gave 
her. She applied electricity as motive power in the 
manufacture of sugar preparations. She bought fruit 
in Germany, France, the United States, and all over 
the world, brought it to England in British steamers, 
made it into jam with cheap French and German sugar, 
and the preserves were exported back to Germany, 
France, and the United States. Thus out of free sugar 
was built up one of the greatest industries which Eng- 
land has to-day. The owners of English refineries of 
sugar had employed about 3,500 men. The new in- 
dustries brought into life by cheap sugar, however, 
employed tens of thousands of men and created an in- 
dustry involving many millions of dollars. 

Permanent prosperity comes from abundance. The 
high prices which spring from scarcity are ever pre- 
carious, and that kind of prosperity is up to-day and 
down to-morrow. The natural law of free exchange 
and competition evolves high wages, low prices, large 
products, and a lessening margin of profit on each 
unit of product. The earth does not everywhere pro- 
duce the same thing. Human impulses always have 



l68 THE TARIFF AND THE TRUSTS 

led men freely to exchange one thing for another, and 
these natural impulses cannot be downed. You will 
buy raw material from the producers of another nation 
because you can profitably exchange your finished 
products therefor, and any government that stops you 
from doing this by restrictive tariffs actually takes the 
bread from the mouths of labor because the working 
of the raw material into finished products calls for in- 
creased labor. To interrupt the currents of exchange 
by statutes is as foolish as to stop the flow of blood in 
the human system by bandages. Free circulation is 
the only method for providing against over-produc- 
tion. Man with his laws never tampers with the ex- 
change of commodities without creating more injury 
than he does good. Ralph Waldo Emerson well said : 
''The basis of political economy is non-interference. 
The only safe rule is to be found in self-adjustment of 
demand and supply. Do not legislate. Meddle, and 
you snap the sinews with your sumptuary laws ; give 
no bounties ; make equal laws ; secure life and property, 
and you need give no alms. The level of the sea is 
not more surely kept than is the equilibrium of value 
in society by demand and supply; and artifice or leg- 
islation punishes itself by reactions, gluts and bank- 
ruptcies." The fluctuations in value which are so com- 
mon, the deficits and surpluses which arise in our 
United States Treasury under the different tariff acts, 
the unsettled condition of business, the eternal appre- 



A TALK WITH MANUFxVCTURERS 169 

hension of change in tariff with times of depressions 
and times of prosperity, all come from the attempt of 
legislators to change the flow of commerce by their 
bandages and their quack remedies. If you could wipe 
away the duties upon raw materials, if you could have 
a freer foreign trade, and then induce your legislatures 
to adjourn for twenty years and give you a period of 
security from the fear of change, such conditions 
would enable you to become the great exporters of the 
world. What is the present condition? You export 
a little upwards of $400,000,000 of manufactured prod- 
ucts yearly. About $120,000,000 of this amount can 
hardly be regarded as manufactured products, be- 
cause it consists of petroleum and copper but a step 
removed from raw material. But granting that it 
should be regarded as manufactured products, England 
exports in the neighborhood of over $1,200,000,000 of 
manufactured products yearly, about three times the 
amount of our exports of manufactured products. 
Taking into account her population of 40,000,000, as 
against our population of 80,000,000, each English- 
man manufactures for export about six times what 
each American does. Our present exports to China 
and Japan and the islands of the Pacific are insignifi- 
cant. The Seattle Star published two or three years 
ago an exclusive interview with James J. Hill, from 
which the following utterances are taken : "As a mat- 
''ter of fact, we have no Oriental trade at present worth 



170 THE TARIFF AND THE TRUSTS 

"snapping a finger at. And we never will have until 
"we can ship over to the other side manufactured 
"products and sell them as do Germany and Great 
"Britain. x\ll we ship now are iron and steel and raw 
"cotton — all raw commodities, and those are a mere 
"bagatelle. Let me tell you something that will give 
"you an idea of the insignificance of even these, our 
"greatest present shipping factors to the Orient — 
"while Great Britain furnishes one-half of the iron and 
"steel to the Orient, the United States furnishes but ten 
"per cent. And this in the face of the fact that we can 
"transport the material just as cheap as can England. 
"Here's another little pin with which to prick the 
"American invasion bubble — the United States has 
"been selling less than one-half of one per cent, of its 
"factory output to all the emerging republics, islands 
"and empires of the Pacific. Our competitors even 
"beat us badly in the Philippines, where we control the 
"tariffs. There we supply only seven per cent, of its 
"imports of competitive goods, the 93 per cent, is sup- 
"plied by our great competitors in trade countries like 
"England and Germany. I had to laugh when I read 
"the magazine articles and newspaper accounts of 
"America's trade conquests in Europe. We Americans 
"were so puffed up about it that we began to make 
"folks across the Atlantic really believe that the Amer- 
"ican invasion was a reality. We shipped over a few 
"pyrotechnical cargoes, a bunch of typewriters and 



A TALK WITH MANUFACTURERS I7I 

''safes, and crowded like a lot of Bantam roosters. But 
*'all the time the value of our manufactures sold in 
''Europe steadily declined, until present records show 
"a drop of one hundred million dollars since 1900. 
"We must look to the Orient. That field belongs to 
''us and we should control it. To do this, we must re- 
"duce the cost of manufactured products and we must 
"change our tarifif — we have outgrown the latter." 
Our exports to South America are also insignificant, 
not one-tenth the amount they ought to be. The truth 
is we have built up a ring fence around America to 
keep out foreign imports and the same fence keeps in 
domestic products. We cannot become great export- 
ers unless we become great importers. We shut out 
the raw material of the East and of South America 
and we shut in the highly finished product of American 
labor. As an example how low duties upon foreign 
importations result in greatly increased exportations, 
I will quote to you from the Hand-Book of the Union- 
ist Free Food League in England in the recent con- 
test between Mr. Chamberlain, as leader of the Con- 
servatives, and the Liberal party. On pages 8 and 9 
of this book are tables showing the movement of ex- 
ports during the periods, in which the nineteenth cen- 
tury may be divided from a point of view of fiscal 
policy, and the result is summed up in these words: 
"During the thirty years (1801-1831) of extreme re- 
"striction (of imports) exports did not expand at all, 



172 THE TARIFF AND THE TRUSTS 

''but fluctuated between a shrinkage of £7,ooo,cxxD and 
''a shrinkage of £5,000,000. During the ten years 
"(1831-1841) of relaxation exports expanded by 
"£15,000,000, an average of £1,500,000 a year. Bur- 
ning the ten years of larger relaxation (1841-1851) 
"exports expanded by £22,000,000, an average of 
"£2,200,000 a year. During the 51 years (1851-1902) 
"after complete freedom exports have expanded by 
"£209,000,000, an average of £4,098,000 a year. This 
"is conclusive proof that unrestricted importation, in- 
"stead of injuring export trade, is a powerful and cer- 
"tain means of promoting it." We ought to be ex- 
porting at least five times the amount of manufactured 
products which we are, and with free ships, free 
commerce, and free raw material we would be export- 
ing that to-day. The freedom of exchange between 
our several states, rather than the tariff, has resulted 
in giving us upwards of eighty millions of the best- 
paying consumers in the world for our manufactured 
products, and with such a home market reasonably se- 
cured to us we ought to enlarge that market to a 
world market. A country as great as ours, with gi- 
gantic natural resources, with free commerce and effi- 
cient labor, can actually absorb to itself a consider- 
able part of the commerce of the world. The policy 
of high protection which we have pursued for forty 
years, if adhered to, will ultimately strangle itself. 
Our resources are so great, our energy so resistless. 



A TALK WITH MANUFACTURERS I73 

that we will burst the bonds that bind us. The 
domestic market no longer suffices. The foreign 
market must be entered, and from the very fact of our 
immense resources and of our efficient use of ma- 
chinery our exports must greatly expand. No other 
people in the world have such resources. No other 
people in the world are capable of making so much of 
them. An increase in the exports of manufactured 
articles is an absolute necessity. A million immi- 
grants come to us every year. Our population is 
rapidly increasing. The free admission of raw ma- 
terial is the safety valve of labor. Starving men do 
not reason. By and by they will appreciate the op- 
pression which the trust prices bring to them, and even- 
tually they will rise and destroy monopoly. Such 
risings show little mercy to the institutions against 
which they are directed or to the individuals whose 
fortunes are bound up with them, and you must not 
complain, if you do not yourselves remedy this evil, 
should scant mercy be shown you when the day of 
reckoning arrives. 

Again, the protective tariff in this country is simply 
driving your manufactories to foreign countries where 
they can get cheaper raw materials and avoid retalia- 
tory tariffs. The Singer Machine Company has es- 
tablished itself at Kilbowie in England, the Babcock 
and Wilcox Company at Renfrew in the same country, 
the Westinghouse Company has established an enor- 



174 THE TARIFF AND THE TRUSTS 

mous plant in the Manchester district, the Chicago 
American Tool Company has built a plant at Frazer- 
burg, near Aberdeen, the Western Electric Company 
of Chicago is interested in extensive factories in Lon- 
don, Paris, Antwerp, and Berlin. The General Elec- 
tric Company has recently constructed a large new 
factory at Rugby in England. The Hoe Company is 
making printing presses in London, where also the 
American Linotype is making machinery. The Draper 
Company has built a factory in Lancashire. The 
American Locomotive Company has recently acquired 
control of the new works directed by the Montreal 
Locomotive and Machine Company, with the intention 
of executing its order for locomotives in Canada. The 
Bullock Electric Works of Cincinnati have established 
branches in Canada which are said to have captured the 
works at Lachine. We read in the Iron Age of recent 
date that Canadian cities are selecting as a new officer 
of the municipality a business agent whose concern it 
is to facilitate the settlement of American manufac- 
tories in different parts of Canada. Louis XIV, by the 
revocation of the Edict of Nantes, drove out of France 
tens of thousands of Huguenot weavers, and they fled 
to England and laid the foundation of modern English 
industries. Philip II of Spain drove tens of thousands 
of Flemish weavers from the Netherlands, and they, 
too, found an asylum in England and helped to lay the 
foundations of her vast industrial system. Our pro- 



A TALK WITH MANUFACTURERS 175 

tective tariff which attempts to control by law the in- 
dustries of this country is no less oppressive than the 
edict of Louis XIV or the tyranny of Philip II, and if 
it succeeds in driving our great industries into freer 
markets where they can purchase their raw material 
reasonably, posterity will pass the same judgment up- 
on us that it has passed upon the despotic government 
of Louis XIV and Philip II. 

The United States Steel Corporation controls a 
large part of the iron ore deposits of the Lake Superior 
Region. Its chain of control over the product from 
the time it is dug out of the ground until it reaches you 
as your raw material is complete. The steam shovels 
that lift the ore, the cars, the railroads themselves, the 
lake steamers, the docks, the smelters and converters, 
the rolling mills and the steel works, are theirs. They 
pay no middleman's profits, and with a good profit 
they can furnish you your raw material for tools and 
machinery and ships and railways more cheaply than 
any other like corporation in the world. In ''British 
Industries,"' a volume recently edited by Professor W. 
J. Ashley, Mr. J. S. Jeans, the Secretary of the British 
Iron Trade Association, says of the English iron man- 
ufacturers: ''There is no obvious reason why, if we 
"are to make iron at all, we should not make it under 
"the best and most economical conditions possible to 
"us. We could hardly lose anything if we raised the 
"productiveness of our plants, reduced the number of 



176 THE TARIFF AND THE TRUSTS 

"hands employed for a given output of iron and steel, 
"and got a larger annual production per yield of cap- 
"ital invested. / cannot justify the British pig-iron 
''makers in only getting an average annual output of 
''about 2^,000 tons per furnace, while the Americans 
"average is 61,000 tons and the average of the bitumi- 
"nous furnaces is only about yp,ooo tons. As with 
"blast furnaces, so with Bessemer converters and open- 
"hearth furnaces. The American efficiency is much 
"larger than our own/' Now, it is conceded by our 
competitors that we can make pig iron and steel cheaper 
than they can, yet the trust is protected against the 
competition of England in iron and steel on an average 
of about 45 per cent., and you are charged for the raw 
materials of your machine shops a price increased by 
nearly the amount of the duty. Is this justice? Should 
the United States Steel Corporation continue to extort 
money from thousands of manufacturers dependent 
upon its product for raw material? They may be a 
balance-wheel holding the market steady, but how can 
you explain the violent fluctuations in pig iron during 
the last four years if this be so? A balance-wheel 
which insures systematic injustice is one, I submit, 
which should be smashed. Our great copper com- 
panies handle their copper in the same manner; they 
have the greatest supplies known in the world, and they 
can furnish you the copper which you use in your 
electrical works more cheaply than it can be furnished 



A TALK WITH MANUFACTURERS ^'J^ 

elsewhere. The same is true of nickel ore, lead, and 
every other element of your manufacture, and yet you 
are paying all these corporations an increased price for 
your raw materials, and attempting under these con- 
ditions to compete with your foreign rivals. How 
long are you going to submit to this? Our ancestors 
fought a seven years' war from Lexington to York- 
town to vindicate a principle no less sacred than your 
right to purchase your raw material of your own 
countrymen at a reasonable price. You know how to 
organize and how to enforce your rights. The millions 
of American farmers, the millions of workingmen, and 
the millions of retired and professional men have not 
the same capacity for organization and redress of their 
like grievances of high-priced necessaries of life. But 
if the great body of smaller manufacturers should unite 
and demand justice from the oppression of the larger 
ones who control the raw material, there is reason to 
believe that a hearing could be procured and a remedy 
applied. Again I submit to your consideration that 
the industries of our country are based upon provi- 
sions of the statute law, and that any industry which 
depends upon the legislature for success is in a peril- 
ous condition. You know the men who represent your 
districts in Congress, and as a rule they are politicians. 
They give little attention to the study of those prin- 
ciples which underlie economy as applied to industrial 
matters, yet upon their judgment and their laws are 

12 



178 THE TARIFF AND THE TRUSTS 

based to quite an extent the welfare of the manufac- 
turer. Is it wise to confer such a power on any legis- 
lature? Do you feel safe with your interests depend- 
ing to such an extent upon legislation ? Have you con- 
fidence in the business capacity of the men who shape 
our laws? Do you not see that frequent changes are 
dangerous ? Do you believe that government can super- 
intend private business without being corrupted ? You 
must know that the pretensions and usurpations of 
politicians have grown to such an extent as to endanger 
every business, that private industries in their hands will 
be no more than a football for political reward or 
private advantage. How many politicians have you 
known that you would entrust with the conduct of 
your business, and if not, how do you expect them to 
exercise business capacity when they attempt to con- 
trol private affairs by law? In 1888 these politicians 
said, ''Leave the Mills Bill alone as it is; it is better 
for the elections." To-day they say, ''Leave the 
Dingley Bill as it is until after election.'' What do 
you think of a condition where the business interests 
of the country depend upon the result of elections? 
The institution of slavery itself did not do more to de- 
grade and corrupt this country than has our recogni- 
tion of the right of political parties to control by law 
our industries. Every department in life from Con- 
gress to State Legislatures, from State Legislatures to 
municipalities, from municipalities to trades unions, 



A TALK WITH MANUFACTURERS I79 

and from the trades unions down to the newsboy at 
the street corner, is demoralized by the aUiance be- 
tween government and private business and by the de- 
sire of many men to get special advantages for classes 
or localities at the expense of the public. This sys- 
tem has encouraged and promoted corruption as the 
institution of slavery never did and as no other insti- 
tution in this country has ever done, and no one knows 
this better than you, who, I fear, have had more or less 
to do with it. Mr. F. W. Cheney, of Cheney Brothers, 
silk manufacturers, at South Manchester, Connecticut, 
in his testimony before the Industrial Commission, 
said of the scramble for legislation whenever a new 
tariff is made: '*You know how it stirs up all the 
selfishness there is in humanity and what a grabbing 
game it is." Protective tariffs are not made by Con- 
gress, they are not dictated by you smaller manufac- 
turers. They are dictated by the great moneyed in- 
terests connected with vast corporations who monop- 
olize more than half the industries of the country. In 
the process legislators are corrupted, society is de- 
bauched, honor is soiled, and self-respect is lost. 

Finally, let me call to your attention that there is 
in the progress of civilization a time at which exclu- 
sive privileges must be relaxed or the possessors must 
perish along with them. That time has come in Amer- 
ican industry. To you who read the chapters in this 
volume on "How England got Free Trade" and on 



l80 THE TARIFF AND THE TRUSTS 

''the German Tariff'' it is unnecessary to tell you what 
I mean. We have reached the same point that ex- 
isted in England at the tirne of the repeal of the Corn 
Laws. Our manufacturing interests have passed the 
point where they supply their own people, and they 
must have markets abroad. They cannot continue to 
sell their products at one price at home and at a lower 
price to foreigners. We are all willing to submit to 
taxation for the support of government, but we will 
never continue to submit to taxation by private cor- 
porations for the benefit of foreigners. To attempt 
under such circumstances to continue exclusive priv- 
ileges is the very height of rashness. You already 
hear the wail of agony from New England. You 
know the attitude of the farmers of Iowa. A time of 
depression will array the great mass of the people 
against such a condition. A time when laboring men 
are hungry and without a job will result in riot and 
almost in revolution. We cannot live as a nation with- 
out justice to the people in every part of the land. We 
cannot afford to array New England against the rest 
of the country by depriving her manufacturers of a 
chance to live and thrive; much more, you cannot 
afford to array the great body of consumers against 
you because you are the possessors of special privileges 
which give you the right to take an undue amount of 
their hard-earned money. Gladstone, in 1881, speak- 
ing to an English audience, said: "As long as Amer- 



A TALK WITH MANUFACTURERS l8l 

ica adheres to the protective system your commercial 
primacy is secured. Nothing in the world can wrest 
it from you while America continues to fetter her own 
strong hands and arms, and with these fettered arms is 
content to compete with you who are free in neutral 
markets. As long as America follows the doctrine of 
protection, or as long as America follows the doctrines 
now known as fair trade, you are perfectly safe, and 
you need not allow, any of you, even your lightest 
slumbers to be disturbed by the fear that America will 
take from you your commercial primacy." All history 
teaches the truth of Mr. Gladstone's words. Fettered 
trade is never progressive trade. Look to Ghent, 
Bruges, and the other early Flemish cities, and see how 
municipal freedom gave life to their manufactures. 
Look at England since the repeal of her duties in the 
forties, and see how wondrously her commerce has 
expanded, while the liberty of the citizen is protected 
with a care almost unknown in the rest of the world. 
Liberty is the soul of industry, and without it industry 
and commerce will shrivel and decay. 



CHAPTER VI 



A TALK WITH LABORERS 



You are often told by politicians that the high price 
of your day's wage, the demand for your labor, and 
your general well-being, all depend directly upon the 
continuance of a high protective tariff. This is not 
true, as you can readily see, by considering the follow- 
ing facts. 

The first contention is that, because of the protect- 
ive tariff and the increased price which it allows manu- 
facturers to charge for their goods, you are receiving 
higher wages than the laborers making competing 
goods in Europe. In short, the argument is that pro- 
tective tariffs mean high wages. They do not mean 
high wages, and duties are not imposed with the idea of 
covering the difference between wages of workmen in 
Europe and in our own country. You are paid high 
wages because your work in the factory by the use of 
machinery is much more effective than the work of 
foreign operatives where less machinery is used. It 
was in the Presidential campaign of 1840 that the con- 
tention that you were competing with pauper labor 
was first set forth. At that time manufacturing in 

182 



A TALK WITH LABORERS 1 83 

this country as well as abroad was largely by hand 
labor. Since that time the invention of labor-saving 
machinery has simply revolutionized the cost of man- 
ufacturing, and to-day, in proportion to the product of 
your day's labor, you receive the lowest wage in the 
world. This has been recognized by many eminent 
men who have investigated the matter. Mr. Hill, 
formerly statistician of the State Department at 
Washington, when before the Tariff Commission, ap- 
pointed in 1882 to determine whether duties upon 
foreign imports should be reduced, said to the com- 
mission that according to the reports of American Con- 
suls in Great Britain in that very year our 5,250,000 
workmen produced double what she did with 5,140,000 
workmen. In 1878 William M. Evarts, then Secre- 
tary of State, through American consuls in different 
parts of the world, collected the facts as to the amount 
of production and cost of labor in Continental coun- 
tries, and summarized those reports in the following 
language : ''The average American workman performs 
from once and a half to twice as much work in a given 
time as the average European workman." Mr. 
Blaine, upon information from American consuls when 
he was Secretary of State in 1881, said: ''Undoubtedly 
the inequaHties of wages of English and American 
operatives are more than equalized by the greater effi- 
ciency of the latter and their longer hours of labor.'' 
Andrew Carnegie said a few years ago : "It is not the 



184 THE TARIFF AND THE TRUSTS 

lowest, but the highest paid labor, with scientific man- 
agement and machinery, which gives cheapest products. 
Some of the important staple articles made in Britain, 
Germany and America are produced cheapest in the 
last, with labor paid double." United States Senator 
Beveridge, of Indiana, in his recent book entitled ''The 
Russian Advance," speaking of the wages of the oper- 
atives in Russian factories, says: ''But low as these 
wages appear, yet, in comparison with the same Amer- 
ican labor, these common workingmen and women of 
Russia may truthfully be said to be overpaid. Their 
wages are less than the wages of American working- 
men, their working ability is still smaller. One can- 
not believe either that the Russian workingman or 
woman for a long time will be as efficient as the Amer- 
ican workingman or woman." Mr. A. Maurice Low, 
a thoroughgoing protectionist, in his recent book pub- 
lished in London, entitled, "Protection in the United 
States" says : "We have the authority of all competent 
observers in America that one of the reasons to explain 
the secret of American prosperity is the great produc- 
tive power of the American workingman, his output 
being so much larger than those of his foreign competi- 
tor that the cost of the American product is less than 
that of any other workman ; and it has also been demon- 
strated that wages and labor cost bear not the relation 
that is ordinarily supposed ; that is it is not true that 
low wages are an indication of low labor cost, but rath- 



A TALK WITH LABORERS 185 

er the reverse, the low-priced workman being usually 
an unintelligent and unskilled worker and unable to 
compete with the high-priced worker of greater intel- 
ligence and skill." Mr. Arthur Shadwell, who gives 
us in his recent work, ''Industrial Efficiency," his con- 
clusions from personal examination and investigation 
of the conditions of labor and the price of labor in the 
factories of Germany, Great Britain, and the United 
States, says, in criticizing the report of the Moseley 
Commission to this country representing the trades 
unions of Great Britain, ''I still maintain that workmen 
do work harder and very much harder in America, not 
in every case, but taken all around. It is not a conclu- 
sion derived from a limited observation only, but rests 
upon the unanimous evidence of the most unimpeach- 
able witnesses, corroborated by observation. American 
factories and workshops swarm with English work- 
men, foremen and managers. I have talked with many 
of them in different trades and different localities, and 
they have all said the same thing." The citations 
above are from the words of protectionist writers and 
speakers, with the exception of Mr. Shadwell, about 
whose opinions as to protection and free trade his book 
makes no disclosure. You will see that they all agree 
that the reason of the higher wage in America is the 
fact that you use efficient machinery to manufacture, 
and that the product of your labor is greater than the 
product of foreign labor. It means nothing to say that 



l86 THE TARIFF AND THE TRUSTS 

laborers in the United States are paid $25 a week and 
in Germany $15 a week since both countries impose 
tariffs upon foreign imports. The question to ask al- 
ways is how much does the American produce with 
machines in a single day and how much does the Ger- 
man produce; then, finding out the product of each 
day's labor, you can determine the difference in the 
earning capacity of the men. Suppose you are em- 
ployed in the manufacture of chairs, and instead of 
being paid so much money for each day's work, your 
employer gives you one chair for each five you make. 
If you make five chairs, you are entitled to one chair 
for your day's labor; if you make twenty chairs per 
day, you are entitled to four chairs for your day's 
work. Now, you are paid money for the day's labor 
because you cannot market your chairs so easily as 
the manufacturer who makes thousands of them. The 
money is only a medium of measuring the number of 
chairs which you have earned and in the place of which 
you have taken money. Your day's wage depends 
entirely upon the amount of the product of the day's 
work, and if by the use of labor-saving machines you 
can make a hundred chairs instead of twenty in a 
day, the amount paid for your labor should be in- 
creased. Assuming that the foreign laborer makes 
his chairs by hand labor and you yours by the em- 
ployment of machinery at every step in the manufac- 
ture, and that the product of your day's labor is a 



A TALK WITH LABORERS 187 

hundred chairs to his two, three or five, you are paid 
the higher wage because the product of your labor is 
so much greater that your employer can afford to pay 
you more because the cost of his product measured by 
the unit of production is much lower than that of his 
competitor. What is true of making chairs is true in 
hundreds of lines of manufacturing in which you are 
engaged. Mr. Leroy-Beaulieu, the eminent French 
writer, in his recent work on the ''United States in 
the Twentieth Century," taking our census of 1900 
and official reports in England as a foundation for his 
statement, says: "Absolutely as well as relatively the 
"number of people in Great Britain engaged in in- 
"dustry is much higher than the number of people so 
"engaged in the United States although the value of 
"the goods manufactured by the former is not much 
"more than half that of the goods made by the latter. 
". . . It can be explained only on the assumption that 
"the American workingman works harder than the 
"workingman of other countries, or that he receives 
"more efficacious assistance from machinery, or that 
"both these conditions prevail. . , . We are perfectly 
"justified in concluding from them that the work of an 
"American workman is, on the average, more pro- 
"ductive than that of the British workman and than 
"that of any other workman in the world." You who 
are employed in factories must have observed that your 
employers are multiplying their machines and drop- 



1 88 THE TARIFF AND THE TRUSTS 

ping men from their employment. One man now at- 
tends to many more machines than he did a few years 
ago, and the improved machines are much more effi- 
cient in the amount of production. 

Again, you are told that all our prosperity is due to 
the protective system, that the general range of your 
wages is created by the protective tariff, and your at- 
tention in that connection is frequently called to the 
pauper labor of other countries. The statement is 
plausible, and it has deceived many a laboring man, 
but it is absolutely without foundation. The people 
of Great Britain for at least the last forty years have 
carried on their industries under a complete absence 
of protective tariffs. In 1879 ^he German Empire es- 
tablished protective duties, with the intent of restrict- 
ing foreign competition. The policy of protection has 
prevailed in France for centuries. Now let us see the 
prevailing rate of wages in each country. The Board 
of Trade in England has recently made a very thorough 
examination with reference to the amount of wages 
paid to workmen in a certain number of trades in that 
country and the weekly wage of laborers in the same 
trades in Germany and France. I have placed below 
the table as it is produced by the English Board of 
Trade in the weekly wage of shillings and pence in 
that country. You will see by examining this table 
that the price of labor in skilled trades in the United 
Kingdom of Great Britain is nearly twice that of Ger- 
many and much higher than it is in France: 



A TALK WITH LABORERS 189 

Comparison of Rates of Wages in Skilled Trades in the 
United Kingdom, Germany, and France 

United 
Kingdom Germany France 

(A) Number of quotations of 

rates of wages on which 
the following results are 
based 470 184 248 

(B) Mean weekly rates for 15 

skilled trades s. d. s. d. s. d. 

I. Capital cities 42 o 24 o 36 o 

II. Other cities and towns. ....... .36 o 22 6 22 10 

(C) Percentage comparison 

(United Kingdom-ioo) 

I. Capital cities 100 57 86 

II. Other cities and towns 100 63 6z 

Sir John Brunner, a member of the English House 
of Commons and at the head of one of the great Eng- 
lish shipbuilding firms, in a letter to the London Times 
of July 14, 1903, based on actual examination of wages 
in Great Britain and European countries, says : "The 
average daily wage paid to the workmen employed in 
the alkali trade is: 

In Germany 78 per cent, of the English rate 

In France 77 

In Austria 56 

In Hungary 43 " " « 

''To earn these wages in Germany, in France, in 
Austria, and in Hungary, the men have to work twelve 
hours a day, whilst in England the men work only 
eight hours a day. We give our men a week's holiday 
annually without stoppage of pay. The German, there- 
fore, has to work 52 weeks twelve hours a day to get 
78 per cent, of the wage of the Englishmen, working 



190 THE TARIFF AND THE TRUSTS 

51 weeks eight hours a day; and the others get less in 
the proportion shown.'' j\Ir. Shadwell in his recent 
work on "Industrial Efficiency in Great Britain, Ger- 
many, and the United States,'' after a most exhaustive 
examination, has arrived at the average daily wage of 
unskilled labor in the three countries in the following 
figures : 

England Germany U. S. A. 

3s. to 4s. 2S. 6d. to 3s. 3s. to 7s. 

The protectionist argues to you as follows : ''The 
United States has protection, the people of the United 
States pay high wages for labor ; England has free 
trade, the employers in England pay lower wages for 
labor than in the United States ; therefore protection 
produces high wages, and free trade produces low 
wages/' Let us continue this logic. France and 
Germany each have a protective system of tariffs; the 
employers in France and Germany each pay low wages. 
England has free trade, and the employers of England, 
compared with those of France and Germany, pay high 
wages ; therefore free trade makes high wages. Now 
you see it and now you don't see it. What do you 
think of the argument that our protective tariflf system 
in and of itself produces high wages? Let us go a 
little farther. From its early history until a recent 
date the importation of foreign imports into New^ 
South Wales has been without protective duties. 



A TALK WITH LABORERS I9I 

Recently New South Wales has become a part of the 
Australian Confederation, and comparatively low 
duties are imposed upon foreign imports to the Con- 
federation. Before the Confederation, however, the 
colony of Victoria, separated only from New South 
Wales by the Murray River, imposed high duties upon 
foreign imports. Now we have for comparison two 
countries lying side by side of about the same density 
of population and under similar circumstances in 
every respect, one having the protective system and 
the other the free-trade system. Now let us see what 
the prices of labor were in these adjoining colonies 
under these different systems. Mr. C. H. Chomley, 
in a recent book entitled "Protection in Canada and 
Australasia," sets forth the following table for daily 
wages for Sydney, the capital of New South Wales, 
and Melbourne, the capital of Victoria, during the 
period of 1892- 1896, when both colonies were suffer- 
ing from depression, and before Victoria had reduced 
her most oppressive duties: 

Melbourne Sydney 

s. d. s. d. 

Carpenters 7 5 8 11 

Bricklayers j ^ 9 8 

Masons 8 6 8 11 

Plasterers 78 8 6 

Painters 6 8 8 o 

Blacksmiths 100 8 6 

Boilermakers 106 9 o 

Navvies 60 6 o 

You will observe that I first compared wages in 



19^ THE TARIFF AND THE TRUSTS 

Great Britain, an old country and densely populated, 
with Germany and France, also old countries and 
densely populated. Now the industrial conditions of 
Belgium in many respects resemble those of England. 
Belgium is densely populated, having 589 persons to 
the square mile, as compared with 558 in England and 
Wales. Both are manufacturing countries, but Bel- 
gium has a moderate protective tariff, and the price 
of labor in Belgium is considerably lower and the 
hours of labor longer than in Great Britain. In Hun- 
gary, like Germany and France, high protective tariffs 
prevail, and if protective tariffs produced high wages 
we would expect to find them in Hungary, yet more 
than one-half of the factory operatives, 53 per cent, 
earn less than $3 per week of our money, and about 
one-third of the remainder earn less than $2.12 per 
week. 

But, coming to our own country, you will find argu- 
ments showing still more clearly that the protective 
tariff system is not entitled to any credit for the price 
of labor in the United States. If the price of labor 
depended solely upon the tariff, it would operate alike 
upon laborers in all parts of the United States. Now 
the fact is that the operatives in our Southern cotton 
factories are receiving an average lower wage than 
the operatives in either the English or New England 
cotton factories. If the protective tariff establishes a 
high price for labor, how is it to be explained that 



A TALK WITH LABORERS 193 

ready-made clothing paying the very highest duty re- 
quired by the tariff is manufactured by the cheapest 
labor in the sweat-shops of our great cities ? Our labor 
is essentially cheap, though the price is high because we 
employ either efficient labor or employ ordinary labor 
assisted by highly developed machinery, and because 
of the superior natural resources of the country and 
the better methods of manufacture. Another evi- 
dence that it is not the protective tariff which estab- 
lishes our prevailing high prices for labor is found in 
the fact that the highest priced labor in our country 
prevails among masons, carpenters, and joiners, 
plumbers, plasterers, painters, compositors, and other 
trades upon which the tariff has no effect whatever. 

You will also observe that necessarily the protective 
tariff can only affect directly the price of wages in 
those employments where European products come in 
competition with the home product and where protect- 
ive duties are imposed upon the foreign product to 
restrict the competition. Our protective tariffs are 
imposed upon cotton goods, woolen goods, glassware, 
pottery, iron, steel, chemicals, cement and a few other 
products. In the manufactories of these products 
machinery is used to an extent unknown in other pro- 
duction in this country, and the result is that not over 
ten per cent, of the men employed in labor in this coun- 
try are actually engaged in manufacturing products 
protected by tariffs. In 1886, at the request of the 
13 



194 THE TARIFF AND THE TRUSTS 

United States Secretary of State, Daniel Manning, 
three statisticians and economists of high standing, 
working by different methods and conducting their in- 
vestigations independently, agreed in the estimate that 
at the outside the proportion of workers employed in 
skilled manufactories which were protected by the 
tariff did not exceed six or seven per cent. The late 
Edward Atkinson, of Boston, who, more thoroughly 
probably than any other American, investigated the 
subject of wages in our country, prepared in his book, 
entitled 'Tacts and Figures," published in 1904, ela- 
borate tables showing the number of men engaged in 
the different occupations of life in this country in that 
year, the product of whose labor had no connection 
whatever with the imports of manufactured products 
from abroad and who in no direct way received any 
benefits from the tariff. He also prepared a table 
showing the industries protected by the tariff and the 
number of operatives engaged in those industries, and 
his conclusions in his own language are as follows: 
'*I think it will prove impossible for any sincere stu- 
dent of the subject to designate one million persons 
out of the twenty-nine million now occupied for gain 
whose industry would be seriously or adversely affect- 
ed, even if all duties on all foreign imports of like 
kind were at once removed. Twenty-five million are 
engaged in arts necessary to the existence of society 
and which can neither be promoted nor retarded by 



A TALK WITH LABORERS IpS 

duties on imports, except so far as the cost of their Hv- 
ing is increased by an ill-adjusted or injudicious sys- 
tem of taxation." 

Again, assuming that you are an operative in a 
factory manufacturing goods protected by the tariff, 
you would expect to find that the rise in your wages 
during the last ten years would have been more rapid 
under the McKinley Tariff, which was enacted in 1890, 
and the Dingley Tariff enacted in 1897, since the duties 
imposed by those tariffs were much higher than the 
duties of any other preceding tariff. The duties pre- 
vaiHng between the years 1883 and 1890 in this 
country on dutiable imports were only about 41.6 per 
cent. ; under the McKinley Bill they were upwards of 
50 per cent., under the Wilson Bill they were about 42 
per cent., and under the Dingley Bill they have averaged 
in the neighborhood of 50 per cent, upon dutiable im- 
ports. Now the inquiry is, have your wages increased 
more rapidly under the tariff existing under the Mc- 
Kinley Bill and the Dingley Bill than under the lower 
tariff duties existing from 1885 ^^ 1890? Following 
you will find a table prepared from the publications of 
the American Commissioner of Labor tracing the 
course of average wages in 67 groups of labor from 
1885 until 1 90 1 in periods showing the price under 
these four different tariffs, the tariff of 1883, the 
McKinley Tariff of 1890, the Wilson Tariff of 1894, 
and the Dingley Tariff of 1897 to 1901. 



196 THE TARIFF AND THE TRUSTS 

Wages Per Day in Dollars 

Occupation 1885-9 189 1-3 

Bakers 2.17 1.57 

Balers (textiles) 1.04 1.17 

Blacksmiths 2.20 2.30 

Bleachers (textiles) 1.67 .... 

Body makers (carriages and wagons). 2.64 1.88 

Boiler makers 2.28 2.29 

Brakesmen (railroads) 1.78 2.42 

Brass finishers 2.48 2.13 

Brass moulders 2.(i'7 2.56 

Brewers 3.19 3.05 

Bricklayers 4.00 4.00 

Brickmakers 1.87 1.76 

Cabinet makers 2.28 2.24 

Carders (textiles) 1.20 1.09 

Carpenters and joiners 2.31 2,26 

Clerks 2.49 2.2^ 

Compositors y 2,^^ 2.73 

Coopers 2.79 2.75 

Cutters (clothing) 3.18 2.90 

Cutters (glass) 2.00 2.00 

Dressmakers 1.63 1.47 

Dressers (textiles) 1.98 2.41 

Dyers (textile) 1.50 1.50 

Finishers (textile) 1.20 1.18 

Finishers (boots and shoes) 2.00 .... 

Founders (iron) 2.08 

Furnace men (foundry and 

machinery shops) 1.73 1.73 

Furriers 3.38 2.02 

Gasmakers 1.65 1.86 

Glass blowers (bottles) 5.15 5.15 

Glass blowers (window glass) 5.00 5.00 

Glaziers 2.51 i .64 

Glove makers 1.33 0.71 

Grinders (foundry and machinery 

shops) 2.44 1.70 

Grinders (tools) 2.25 2.19 

Harness and saddle makers 1.39 0.73 

Iron workers 2.24 1.85 

Jewelers 2.2y 1.92 

Joiners 1.94 1.48 

Lasters (boots and shoes) 2.34 2.01 

Machinists 2.16 2.07 

Masons 3.25 2.96 

Millers (flour) 2.55 1.97 





1897- 


1895-6 


I9OI 


2.39 


2.17 


1.36 


1.02 


2.20 


2.16 


I.3I 




2,05 




2.30 


2.28 


2.18 


1.84 


3.00 


2.75 


1.69 


1.78 


2.37 


2.45 


4.00 


3.53 


1.60 


1.42 


2.98 


2.38 


0.95 





2.20 


2.42 


1.75 


1.74 


2.45 


2.63 


1.83 


1.42 


3.25 


2.^6 


2.17 


2.83 


1.45 


1. 17 


2.09 




1.27 


1.69 


1.30 


1. 17 


3.II 


3.15 


2.07 


— 


1.75 


.... 


2.06 


2.19 


1.73 


1.60 





3.97 




4.00 


1.96 


2.36 


1. 17 


— 


3.1 1 


2.05 


1.99 




2.25 




2.53 


2.75 


2.51 




2.25 




2.24 


1.80 


2.05 


1.78 


4.00 


z^z(> 


2.13 


1.98 



A TALK WITH LABORERS I97 

Wages Per Day in Dollars. — Continued 



Occupation 1885-9 

Miners (coal) 2.69 

Painters 3.50 

Paper makers 1.50 

Piecers (textiles) 0.98 

Plasterers 4.00 

Plumbers 3.50 

Puddlers 3.47 

Quarrymen 2.31 

Riveters 1.3S 

Rope makers 1.58 

Sailmakers 2.71 

Ship carpenters 2.84 

Shoemakers 2.28 

Spinners (cotton) 1.74 

Stereotypers 3.00 

Tanners i .92 

Tinsmiths 3.25 

Upholsterers 3.00 

Weavers (cotton) 1.23 

Weavers (silk) 2.42 

Weavers (wool) 1.57 

Wheelwrights 2.77 

Winders (textiles) 1.28 

Woolsorters 2,7^ 



An examination of these sixty-seven groups shows one 
thing at least clearly — that there has been no general 
upward movement of wages. In only some eight 
cases is the last average wage higher than in any of 
the preceding periods; and, on the other hand, in 
thirty-six cases the average for the period 1897-1901 
was lower than the average of some one of the earlier 
periods. The average for the five years 1897-1901 is 
lower in thirty-one groups out of forty-six for which 
the figures are given above than the average for the 
five years 1885-1889; that is, in those industries wages 







1897- 


I89I-3 


1895-6 


1901 


I.9I 




1.82 


3.41 


3.50 


3-04 


1.72 


3-00 


.. . . 


0,90 


0.68 




3.59 


4.00 


3.22 


3.50 


3.74 


3.19 


3.29 


4.50 


2.92 


1.99 


1.63 




1.44 


1.75 




1.40 


1.08 




2.50 


2.50 


3-00 


2.75 




3.25 


1.79 


2.00 


1.94 


I, II 


1.50 


1.79 


2,67 


2.70 


3.42 


1.67 


1.68 


.... 


2.50 


2.44 




2.02 


2,66 


1.82 


1.02 


1.36 




2.29 


1.89 


1.86 


1.35 


1.57 


1.39 


2.50 


2.75 




0.97 


I. II 


1.12 


1.25 


2.09 





198 THE TARIFF AND THE TRUSTS 

were less than in the years before the United States 
entered upon its ultra-Protectionist policy. 
We tabulate these results thus : 

Total number of groups (ij 

Number in which the wages for the last period (i 897-1 901) 

are given 46 

Number in which wages were highest in the last period 8 

Number in which wages in the last period are below the 

average of the first period (1885-9) 3i 

That is to say, that in two cases out of three, wages are 
actually lower in the last five years' period than in the 
period before the McKinley Tariff. The Board of 
Trade in England, taking the same occupations in the 
same years, and ascertaining the wages in those same 
occupations, find that, while between 1885 and 1898, 
and 1897 and 1900, there was according to the above 
figures a rise in the wages of American workmen of 
only 5.5 per cent., the wages of English workmen in 
the same employment and during the same time rose 
over 13 per cent. 

Protectionist writers and speakers will tell you, how- 
ever, that the tariff keeps out the foreigner's goods, 
and therefore gives you just so much more work to 
do. They will tell you that to the full extent of the 
exclusion of imported goods our manufacturers will 
produce like goods, and therefore have more work for 
the laborer. A more deceptive statement in its nature 
cannot be found. A country can obtain any com- 
modities which it needs in one of two ways ; either by 



A TALK WITH LABORERS I99 

producing them directly or by producing something else 
and exchanging that for the products of other people. 
It therefore follows that the exclusion of foreign goods 
cannot materially increase the demand for labor in the 
importing country, since, in case the foreign goods 
come in, you must produce another product to pay in 
exchange for them. You would manufacture the 
goods used to pay for the goods now shut out but which 
would be imported under lower duties, so that the 
number of your day's work would not be less. Ex- 
change of goods is not made between the United States 
as a nation and a foreign country as a nation, but be- 
tween the people of the two countries. Men never 
exchange their products unless both parties believe 
that they are benefited by the transaction. We trade 
our goods, not for the money of other people, but for 
the goods that other people can make cheaper than we 
can make them, and when we import we pay in the 
end for the imports, not money, but other goods. In 
the days before the Civil War the heads of the house- 
hold were in the habit of making their own clothing, 
and many men cobbled their own footwear and made 
their own furniture. Why do we now buy our cloth- 
ing and our shoes? Simply because we can make 
something else with less work and dispose of it ad- 
vantageously in exchange for these commodities. To- 
day economy in production depends upon the division 
of labor. One man does a single kind of work con- 



200 THE TARIFF AND THE TRUSTS 

tinuously in each process of manufacturing. Now, it 
is exactly the same when one country manufactures 
its specialty and exchanges it for the specialties of 
other countries. The German excels in the manu- 
facture of chemicals because the chemical companies 
of Germany expend a large amount of money in the 
employment of German chemists to make and utilize 
discoveries in chemistry. The English excel in the 
manufacture of cotton because of certain conditions 
of their climate favorable to the manufacture of the 
higher priced cotton prints, while the French excel in 
the manufacture of fine dress goods because of long 
experience in that line. We in the United States excel 
in the manufacture of boots and shoes, of iron and 
steel, of furniture, of tools and hardware, and in many 
other lines. So you see that each country specializes, 
just as the manufacturer in our shops specializes by a 
species of subdivision of labor. When we import 
chemicals from Germany and export our special 
staples in payment to Germany, we are applying to 
transactions between the people of the two nations 
the same principle which the farmer who made his 
necessaries before the war employs in swapping his 
products for necessaries now. When different people 
exchange with each other those specialties in which 
they excel, the result is a saving of time and money 
to both parties in the transaction. Let me give you 
an illustration: the Chinaman uses cheap cotton drills 



A TALK WITH LABORERS 20I 

for clothing, and it would take a month to make 
sufficient cotton cloth for a suit of clothes upon one 
of their antiquated looms, but the amount of labor 
which they expend in growing a quantity of tea is 
probably only one-thirtieth of the amount which would 
be required in growing the same amount of tea in this 
country. Now we can make a sufficient amount of 
cloth for the suit of a Chinaman in our Southern 
factories with one-thirtieth the amount of labor re- 
quired by the Chinaman to make the cloth. Will it 
not pay us both to exchange cotton cloth for tea? 
Trade between the people of different nations is good 
in its inmost nature and results. It always was good, 
and it always will be good. It has been the cause of 
every advance of civilization the world over. Gov- 
ernment never trades ; what it does is to interrupt and 
forbid trade for the benefit of special interests. Our 
government, by such laws as the Dingley Tariff, may 
limit and lessen and mangle trade, but it is beyond its 
power to really foster or upbuild it. Different coun- 
tries have different climates and different conditions 
for the development of manufacture, so that trade be- 
tween different peoples is economical and sometimes 
absolutely necessary. Bleaching has always been an 
important part of the linen industry, and, owing to the 
admitted superiority of the Irish bleach, a consider- 
able quantity of linen is sent from Belgium, France 
and Germany to be bleached in Ireland and returned 



202 THE TARIFF AND THE TRUSTS 

to those countries for sale. The excellence of the Irish 
bleach is due to its humid temperate climate. The 
people of Ireland import flax from other countries. 
The flax is spun in Ireland into yarn and sold back to 
France and Belgium. In the latter countries it is 
woven into linen, which is sent back to Ireland to be 
bleached and finished, and then it goes back again to 
the countries whence it came. Free trade between 
countries is the right principle, because it gives each 
country the command of the world's products so that 
it can specialize in those lines for which it is best 
suited and exchange them for the products which it is 
least able to produce. The protectionists tell you, 
however, that we pay for foreign goods in money. I 
tell you that we scarcely ever pay for foreign goods in 
money at the end of the transaction. We pay for 
foreign goods by sending to them our boots and shoes, 
or iron and steel, or furniture, or hardware, or some 
other product in the manufacture of which we excel 
foreign countries. Foreign trade in the main is simply 
swapping goods for goods, and the goods which the pro- 
tected manufacturer by tariffs keeps out of our ports 
are simply goods which if they were admitted to our 
ports without duties would be paid for by your labor 
in the manufacture of other goods to trade therefor, 
and the amount and value of your labor would not 
thereby be decreased. We do not always pay for im- 
ported goods by exporting goods to the same country 



A TALK WITH LABORERS 203 

from which we import the purchased goods, but in 
such case we do pay for them by exporting goods to 
other countries, and bills of exchange for imported 
goods to England are frequently paid through the 
banks of South America or Asia or South Africa, and 
goods shipped there reduce a balance against us In 
England or France or Germany. It is simply because 
the transaction of trade with foreign countries is a 
complicated one, and on the face of it appears often to 
be an exchange of goods for money, that protectionists 
have so long deceived the laboring man. England, 
Germany, and France all import more goods than they 
export and increase in wealth with rapidity and the 
fact that they can afford to import so many is simply 
an evidence, not of weakness, but of wealth. So you 
see that if the restrictions of the tariff were removed 
and the imports of foreign goods increased that these 
increased imports would be paid for by your labor 
through increased exports. You would be making 
goods in the manufacture of which you excel foreign 
workmen to pay for goods in the manufacture of 
which they excel you, and the result would be a saving 
of labor to both of you. The shut door prevents the 
going out of goods as much as the coming in of goods, 
and the open door, if it allows coming in, also allows 
the going out of goods. In other words, we cannot 
become great exporters unless we become great im- 
porters. 



204 THE TARIFF AND THE TRUSTS 

The protectionists tell you that protective tariffs in- 
crease the numbers of men employed in manufacturing. 
The number of men employed in the shops of manu- 
facturers in recent years has not increased, and I will 
prove it to you. In the tariff of 1883 the duties were 
low compared with the McKinley Bill of 1890 and the 
Dingley Bill of 1897. The duties of the Wilson Bill, 
passed in 1894, were a little higher than the duties 
under the act of 1883. According to the protection- 
ists' contention, your number employed in the factories 
ought to have increased rapidly since 1890 under the 
McKinley Bill, the Wilson Bill, and the Dingley Bill. 
What are the facts? The following table will show 
the number of men employed in the factories between 
1880 and 1900 and the ratio of increase: 

1880 1890 1900 

Number of men 2,732,000 4,712,000 S»7i9,ooo 

Absolute increase 1,980,000 1,007,000 

Percentual increase 72% 21% 

Now let US consider the increase in the total sums paid 
in wages and salaries. The figures are: 

1880 1890 1900 

Wages and salaries. .$947,000,000 $2,283,000,000 $2,735,000,000 

Absolute increase 1,336,000,000 452,000,000 

Percentual increase 141% 11% 

That is, in 1900, after ten years of high protection, on 
the average lower wages were being paid than in 1890. 
From 1 880- 1 890 the total of wages and salaries in- 
creased much more than the number of people em- 



A TALK WITH LABORERS 20$ 

ployed, from 1890 to 1900 it increased much less. 
Now what do these figures mean ? They mean simply 
that the collective force in factories is not increasing 
in the same ratio as the number of men employed in 
non-protected industries. The protected trust is most 
frequently found in those industries in which the use 
of machinery is carried to the utmost limit possible, 
and in which as a consequence less human labor is re- 
quired to obtain a given product value. The pro- 
tected manufacturers are seeking with the greatest 
vigor to make the machines take the place of men, for 
machines do not eat and machines do not strike. The 
operatives in textile factories and in all highly organ- 
ized manufactories number fewer and fewer as the 
machinery becomes more automatic, until at last it 
will become one great combination of mechanism in 
which a few experts will keep the machines in order 
and but few operatives will be found in the weaving 
room. 

Now I wish to tell you what will increase the de- 
mand for your labor. The removal of these high 
duties will multiply many fold the demand for your 
labor. It will accomplish that result in just this way. 
Thousands of manufacturers in this country are unable 
to export their products to-day because of the high 
prices which they have to pay for their raw material, 
their steel, their iron, their tin plate, their wire, their 
brass, their lead, their hides, their coal and every ele- 



206 THE TARIFF AND THE TRUSTS 

mental product which is used in their factories. With 
our superior machinery and our more intelHgent labor 
and with free raw materials in manufacturing we 
could in twenty years lead the world in exporting. 
Few manufacturers understand fully the reason why 
they cannot export, and very few politicians spend any 
time in studying the subject. The result is that the 
American people, the most vigorous, enterprising peo- 
ple in the world, with superior machinery, with intel- 
ligent mechanics in their factories, and with large 
supplies of raw material, are comparatively as far be- 
hind England and Germany in exporting manufactured 
products as China is behind the American people. The 
comparative exports of manufactured products in the 
year 1902 of the leading industrial countries of the 
world were as follows: 



Great Britain £230,000,000 

Germany £150,000,000 

France £ 85,000,000 

United States £ 80,000,000 



The United Kingdom of Great Britain, with a popu- 
lation of about 40,000,000 of people in the year 1902, 
exported £230,000,000 of manufactured articles, while 
the United States with a population of 80,000,000 ex- 
ported £80,000,000. Taking into account the popu- 
lation the exports of manufactured articles from the 
United Kingdom of Great Britain in 1902 was about 
£6 per head, while the exports of manufactured articles 



A TALK WITH LABORERS 20^ 

from the United States amounted to £i per head. 
Germany, with 54,000,000 people and with a duty of 
25 per cent, upon dutiable imports, exported nearly 
twice as much as we exported, while France, which is 
known throughout the world as the dying nation of 
Europe, with a stationary population of 38,000,000, 
exported £85,000,000 of manufactured articles. We 
ought to be exporting at least a billion and a half dol- 
lars' worth of manufactured products every year, and 
we would be exporting that amount were it not for 
the fact that our antiquated tariff by shutting out im- 
ports shuts in exports and by imposing duties upon the 
raw material of manufacture makes the price thereof 
so high that our manufacturers cannot undersell their 
competitors except in a few specialties. 

So far I have been discussing with you the question 
of labor, as though the nominal price paid to you for a 
day's labor was the real wage which you received. 
This conception of the price of your day's wage is en- 
tirely erroneous. The real price of labor is the amount 
which you can buy of the necessaries of life with the 
day's wage. Your prosperity is not measured by the 
price of the day's labor, but by what you have left of 
that price after you have bought the necessaries for 
yourself and family for that day. The money price of 
the day's labor is only a means devised by men to 
avoid the inconvenience of paying you for your day's 
labor in kind. The object of work on the part of 



208 THE TARIFF AND THE TRUSTS 

every man is to obtain the necessaries of life for him- 
self and his family. If, instead of receiving two or 
three dollars a day, you were to receive a pair of shoes 
or a coat, you would not be deceived in the price of 
that day's labor. Now, between July i, 1897, and the 
1st day of June of the present year, the price of the 
necessaries of life, according to Dun's Mercantile 
Agency Reports, have increased in cost 47.4 per cent, 
so that even if your wages during that same period 
had been increased say 25 per cent., you have actually 
been deprived by the protective tariff and the trusts of 
upwards of 20 per cent, of what your real wages ought 
to have been. The manufacturer may increase the 
amount of your daily wage, but so long as the trusts 
increase the price of the necessaries of life more rapid- 
ly than he increases your wage, you are really re- 
ceiving a lower wage than before. 

The tariff taxes bear much more heavily upon you, 
because, under the McKinley Bill and the Dingley 
Bill, many duties were made specific, so much per 
pound, per square yard and per bushel, and the result 
is that the lower priced grades of goods bear extreme- 
ly high duties in comparison with the more costly 
grades. You will find in this volume in the history of 
our tarifif a fuller description of the operation of these 
specific duties. So high are they upon the lower 
grades of imported articles that their importation is 
prohibited, and the manufacturer is left free to charge 



A TALK WITH LABORERS 2O9 

you what he pleases. Taking rent, clothing, etc., into 
consideration, even the apparent advantage enjoyed 
in the high prices of American wage earners disap- 
pears. According to a report in 1903, Mr. Carroll 
D. Wright, the Director of the United States Labor 
Department, estimates the cost of living in our own 
and European countries, not in percentages of wages, 
but in the number of days' earnings absorbed by the 
purchase of the necessaries of life. By such a method 
he comes to the conclusion that the number of work- 
ing days of a man required to cover the cost of hous- 
ing, food, clothing, lighting, heating, and taxes of the 
average family are in 

England 205 days 

United States 225 days 

France 23 1 days 

Germany 240 days 

Russia 286 days 

Italy 290 days 

So you will see that it takes the wages of the American 
laboring man for twenty days to cover the additional 
cost of housing, food, clothing, lighting, heating, and 
taxes over the cost to the English workingman. 

The protectionists tell you that the amount of the 
duty on a foreign product which comes into competi- 
tion with a domestic product is determined by the dif- 
ference between the labor cost of manufacturing the 
product in this country and abroad, and is a measure 
of the diflference in value between your labor and that 
14 



2IO THE TARIFF AND THE TRUSTS 

of the foreign laborer in the same Hne of work. This 
is a palpable mis-statement. There has scarcely been 
a case since 1864 where the domestic product was pro- 
tected that the amount of the duty imposed upon the 
competing foreign product was not actually more than 
the whole labor cost of the manufacturer in making 
the domestic product. Let me give you a few glaring 
instances. The duty on iron ore is 40 cents per ton, 
the duty on pig iron is $4 per ton, the minimum duty 
on steel billets is %6,y2 per ton, and the duty on steel 
rails is $7.84 per ton. Now the United States Steel 
Trust owns the deposits of ore, transports it from the 
Lake Superior mines by its own railways and steam- 
ers, and converts it into pig iron and billets and steel 
rails, the amount of all the tariff duties being several 
times the amount of the entire labor cost in making a 
ton of steel rails. In 1870 Congress imposed duties 
upon steel rails of $28 per gross ton, and this duty con- 
tinued until 1883. By 1877 the average price of steel 
rails in England was only a little over $31 per ton, and 
it continued at about that price until 1881. The own- 
ers of steel rails during this period owned the patent 
for the use of the Bessemer process and could manu- 
facture steel rails as cheaply as the English manu- 
facturers, and yet for the years between 1877 and 1883 
they sold their steel rails from sixty-one to sixty-seven 
dollars per ton, about twice the value of the English 
rails delivered in New York. Professor Taussig, in 



A TALK WITH LABORERS 211 

his 'Tariflf History of the United States/' says of this 
period : *'The domestic producers of steel rails secured 
enormous profits of loo per cent, and more on their 
capital during these years/' The labor cost of a ton 
of wire rods in the years immediately following the 
McKinley Tariff was $1.95, yet the duty was $12 a ton, 
more than six times the labor cost. The whole labor 
cost of a yard of four-ounce flannel in the eighties was 
3 cents a yard, yet the duty under the Tariff Act of 
1883 was 8 cents a yard, and the McKinley Act put it 
still higher. The sugar manufacturer is protected on 
his refined sugar to the amount of 12^ cents per 
hundredweight. The labor cost of refining sugar is 
not to exceed 10 cents a hundred pounds, and the 
American consumer pays in the increased prices for 
sugar more than the entire labor cost of refining. The 
census of 1900 shows that the manufactured products 
of the country for that year were about $13,000,000,- 
000, and Carroll D. Wright gives i/J^ per cent, of the 
cost of the manufactured article as the proportion 
which the laborer received. Seventeen and one-half 
per cent, of the cost of the manufactured article goes 
to labor, and the average duty upon dutiable foreign 
products which compete with the domestic products is 
about 50 per cent. Stated in another way, your em- 
ployers get duties to the amount of an average of 
about 50 per cent, upon dutiable imports imposed for 
the purpose of covering the difference between the 



2J2 THE TARIFF AND THE TRUSTS 

price of your labor and the foreign labor, while 175^2 
per cent, of the cost of the manufactured article is 
the entire labor cost of the article. The American 
people pay the trusts in increased price more than the 
entire labor cost of the article for the purpose of tak- 
ing care of the difference between the cost of your 
labor and that of your foreign competitor ; and that is 
not all, you do not get a penny's benefit from it. 

This whole system of duties is sustained, according 
to the manufacturers, for your exclusive benefit. You 
are the sole beneficiaries of this benevolent legislation, 
but the commodity which you have to sell is your labor. 
Your competitor is the foreign laborer, and unfortu- 
nately labor is upon the free list. If the manufacturer 
is so interested in your behalf, why does he not aid you 
in the only possible way of protecting your labor, and 
that is to procure a law restricting or prohibiting im- 
migration, thus destroying competition with the foreign 
laborers who come to this country in the number of 
about a million a year and take your jobs. In that 
manner, and in that manner only, can the price of labor 
be protected. I trust, however, that laboring men will 
never attempt to prohibit immigration. The attitude 
of labor should be: "We do not wish favors from 
government, and we will see to it that other men do 
not get favors. We will vote against any party which 
favors special legislation or special privileges of any 
name or nature." 



A TALK WITH LA"BORERS 21 3 

The price of your day's labor is higher than that of 
the laboring men of other countries for reasons en- 
tirely distinct and separate from the effect thereon of 
protective tariffs. Your competitors in Continental 
countries can well be regarded as representing pauper 
labor, but how has this pauper labor been produced? 
It has simply been produced by carrying out in Europe 
for centuries the protective policy. This policy has 
long existed in European countries, not only between 
different countries, but between cities and counties 
and divisions of the same county. The protective 
policy until the last century hedged in every city in 
Germany, Austria, Italy and France. A peasant of 
France could not exchange the product of his labor 
with the peasant in a neighboring province. The 
manufacture of commodities was confined to the 
guilds. The whole policy of those countries was 
restrictive and protective in its nature. Trade was re- 
garded as a monster, and barriers against it were set 
up on every highway. The same condition exists in 
China to-day, and did exist in Japan until recent years. 
Wherever it has existed laboring men have been little 
better off than serfs, and are even to-day but little bet- 
ter off than serfs. To-day throughout protected Ger- 
many and Austria almost every city has its markets for 
the sale of dog and horse meat. Herr Richard Calwer, 
in an excellent book entitled '^The Commercial Year 
1902," recently published by Gustav Fischer, of Jena, 



214 '^HE TARIFF AND THE TRUSTS 

tells US that in Plauen, the center of the lace curtain 
industry of Germany, the consumption of horses and 
dogs as articles of food increased largely in the year 
1902. Let us quote Herr Calwer : "In some towns the 
slaughter of horses has greatly augmented. Thus, in 
Beuthen, in Upper Silesia, the increase amounted to 
200 per cent.; in Rostock, 80; Brandenburg-on-the- 
Havel, "j^-, Frankfort, 50; Barmen, 44; Wurzburg, 
40; Kaiserslautern, 39; Wiesbaden, 38; Leipzig and 
Konigsberg, 37 per cent. The demand for horseflesh 
in Berlin advanced so greatly that the horse-slaughter- 
ers were compelled to pay 15 to 20 per cent, more for 
animals than previously, and in consequence the prices 
of horseflesh and horse sausages rose. The Berlin 
horse-slaughterers, who usually satisfy their require- 
ments in Berlin and neighborhood without any diffi- 
culty, were compelled to send out buyers, who traveled 
the province buying horses for slaughter." Berlin had 
46 markets in 1904 for the sale of horseflesh and 
slaughtered 11,900 horses for food. In Vienna no 
fewer than 20,000 horses are slaughtered every year 
for human food, and these conditions are the direct 
result of centuries of special privilege, restricted in- 
dustry, and terrible injustice. These countries are 
densely populated. In England, as we have seen, the 
population is 558 persons to the square mile, while the 
population in our own country w^ill probably not exceed 
25 persons to the square mile. The day's wage in this 



A TALK WITH LABORERS 21 5 

country for this reason has always been high in times 
of low tariffs as well as high tariffs. This range of 
wages is due to the immense natural resources of the 
country and to the energy and intelligence with which 
these resources have been utilized by our manufactur- 
ers and industrial leaders. We started with a new 
continent, with land had for the asking, with natural 
wealth unmeasurable, with cities to be built and rail- 
ways to be constructed, all of which has made a great 
demand for labor. The price of labor depends, not 
upon protective tariffs, but upon the energy and in- 
telligence of the laborer, the demand and supply of 
labor, and the product of a day's labor which is greatly 
increased by our use of improved machinery. We 
have a country about as large as Europe with every 
variety of climate and after a hundred years its rich- 
ness remains unexhausted. We have absolute free 
trade between upwards of fifty states and territories 
in this great domain. The area of our farms in the 
West is large, and more machinery is used in planting 
and harvesting crops than in any other country. Our 
invention of labor-saving machines almost equals the 
whole of those of the rest of the world. We have 
gathered together from every part of the world the 
bravest and the most energetic of men. These are 
the reasons for high-priced labor in this country, and 
these are the reasons why it will continue in the future. 
Charles Dickens wrote from Boston in January, 



2l6 THE TARIFF AND THE TRUSTS 

1842 : ^^There is no man in this town or in this State of 
New England who has not a blazing fire and a meat 
dinner every day of his life. A flaming sword in the 
air would not attract so much attention as a beggar in 
the streets." Now let us see how the scene has 
changed. In December, 1894, Mr. John Burns told 
the citizens of New York that his observations had 
shown him that the houses in Whitechapel itself — the 
poorest quarter in London — were clean, wholesome, 
and luxurious compared with the horrible tenements in 
which lived the workers of the chief city of the United 
States. The marked change in the condition of labor 
did not appear until about 1873. Since that time, 
under high protection, the condition of our laboring 
men has been steadily moving toward the condition of 
labor in Europe. The cause is perfectly apparent. 
Our method of indirect taxation by the imposition of 
duties bears with great severity upon the poor. It is 
a tax on what men eat and drink and wear rather than 
on what they possess, and the average laboring man, 
whose entire property will not perhaps sell for $1000, 
pays about as much tax as the wealthier man worth a 
hundred times more. Alexander Hamilton, under 
the title of *Tublius Crassus,'' said of protection: 
''Protection, to be available, must be got out of the 
belly and back of the great mass of the people." 
Richard Cobden in 1841, before the House of Com- 
mons, said of the Corn Law : "The family of a noble- 



A TALK WITH LABORERS 217 

man pays to the bread tax about one halfpenny of 
every hundred pounds of his income while the effect 
of the tax on the family of the laboring man was not 
less than twenty per cent." Every particle of clothing 
on your body, from the boots on your feet to the hat 
upon your head, without one single exception, costs 
you from fifty to one hundred and fifty per cent, more 
than it would without the tariff. The trust sits by 
your fire and your table, taxes every piece of glass, 
cutlery and pottery in your house, makes you pay trib- 
ute upon every piece of wool, cotton, and furniture 
in your home, and robs you steadily day in and day out 
by its excessive prices. Remember that this increased 
price does not go to sustain the government. More 
than 19-20 of it at least goes into the treasury of the 
trust. Even now in ten thousand villages and cities 
all over this land your wives are in the markets with 
your wages in their hands buying a few comforts in 
the shape of cotton or woolen goods, sugar, soap, 
dress goods, carpets, glassware, pottery, cutlery, or 
furniture, and paying therefor from fifty to two hun- 
dred per cent, over the value of the imported article 
without duties, about every penny of which goes into 
the treasury of the trust. In Europe they say that 
every peasant has to carry upon his shoulders a soldier. 
Our standing army compared with European coun- 
tries is comparatively small, but you gentlemen have 
to carry upon your shoulders a brood of trusts which 



2l8 THE TARIFF AND THE TRUSTS 

plunder you for private purposes to an amount which 
no European government ever taxed its subjects. 
''Look/' say the protectionists, ''at the workingmen in 
free-trade Engknd and think how much better off 
you are." The difference is that their condition has 
been steadily improving, while your condition has been 
steadily growing worse. The average weekly wages 
of labor in the skilled trades in London in 1840 was 
23s. id., and in 1903 it was 42s. The same increase has 
taken place throughout the whole of Great Britain, 
while, better than this, the price of the necessaries of 
life has decreased about one-half during the same 
period. Are you laboring men afraid of free trade 
or anything else that is free ? Five hundred years ago 
the laboring men of the world were serfs and slaves. 
The right of the laboring man to his day's labor is the 
result of a sea of blood. From scaffold to scaffold 
and from stake to stake through five hundred years a 
thousand martyrs have carried forward the torch of 
liberty, and you are free to-day and own your day's 
wage, your home and all that you count dear because 
of their sacrifices. Industrial freedom and political 
freedom are the life-blood of labor. Never fear free- 
dom in any form, for freedom to you is life and hope 
and everything that goes to enlighten and ennoble. In 
1846, on the very night when the House of Lords com- 
municated to the Commons that it had passed the law 
repealing the duties on corn, the landowners of Eng- 



A TALK WITH LABORERS 2ig 

land in the House of Commons, indignant with Sir 
Robert Peel for taking away from them the right to tax 
the poor of England, combined with his adversaries 
and defeated him upon an important measure. He 
resigned his office, and in his speech to the Commons 
said, ''I shall leave a name execrated by every monop- 
olist, who, from less honorable motives, maintains pro- 
tection for his own individual benefit; but it may be 
that I shall leave a name sometimes remembered with 
expressions of good will in those places which are the 
abode of men whose lot it is to labor, and to earn their 
daily bread by the sweat of their brow — a name re- 
membered with expressions of good will, when they 
shall recreate their exhausted strength with abundant 
and untaxed food, the sweeter because it is no longer 
leavened by a sense of injustice." Years after, thou- 
sands of English workingmen, each bringing his small 
contribution, erected a monument to his memory, and 
placed upon it this inscription : '^He gave cheap bread 
to the poor of England." 



CHAPTER VII 



A TALK WITH FARMERS 



I WISH to address a few plain words to you, not as 
Republicans nor as Democrats, but as thoughtful men 
interested in your own welfare and the permanent 
welfare of your country. If you read these words 
through the eyes of your political prejudices they will 
have been written in vain, for no sophism is too gross 
to delude minds distempered by party spirit and no 
truth is strong enough to convince them. It matters 
not whether you are Republicans or Democrats. 
Frequently have the leaders of both these parties de- 
ceived you. A Democratic Congressman once asked 
Galusha A. Grow to attend a committee meeting when 
a contested seat case was to be heard. "Is he one of 
your rascals or one of our rascals?" responded Mr. 
Grow. It is of little importance for which set of 
rascals you cast your vote, since without doubt many 
of both parties are rascals and have been aiding the 
manufacturers and the trusts to deceive and wrong 
you for years. Your Congressman, as a rule, spends 
his time in Congress caring for the interests of great 
corporations and trusts, and then comes around to 

220 



A TALK WITH FARMERS 221 

you once each two years gushing with enthusiasm 
and giving you, as the boys say, ''a heap of taffy." 
He has a bucketful of patriotism for the campaign 
and an open hand in Congress for every trust and pro- 
tected interest that applies. ''The more you get out 
of your country, the sweeter it is to die for it," says 
Sam Slick, and ''the more you get out of politics the 
more valuable it is to be loyal to the trusts," says your 
member of Congress in his secret heart, while he talks 
to you about the greatness of your country and the 
glory of your flag. "Boys," said a country school- 
ma'am on Decoration Day, "do you know what that 
flag is on the wall for to-day ?" Up goes the hand of 
a little fellow, and he responds, "Yes'm, it's to hide the 
dirt." The flag is waved to the echo of pulmonary 
eloquence every two years by men who by this means 
are trying to hide the dirt. I am bound to tell you the 
truth, and it will not sound like flattery, for the truth 
is that you farmers are veritable sheep from whom 
every one snatches as much wool as he can tear off, so 
that not infrequently you are completely fleeced. These 
seem to be harsh words, but they are not so intended. 
Even though you are indignant at my plain speaking, 
if that indignation arouses you to examine carefully 
this question and to talk it over at your fireside, with 
your neighbors, and at your grange, I am willing to be 
the subject of your ill-feeling. You have been treated 
by our government so unjustly for the last forty years 



222 THE TARIFF AND THE TRUSTS 

that nothing short of plain speech could do the subject 
justice. 

Forty years ago the farmers made their candles, 
soap, lard, and tallow, smoked their hams, and spun 
the yarn for their clothing; this has all passed away 
because ingenious labor-saving machines do all these 
things now a thousand times easier than they were 
done in the olden day. Immersed in your work, you 
have failed to appreciate that the trusts are actually 
charging you more for thousands of necessaries of life 
now made by machines than you paid many years 
ago. You cannot mention an article in your house or 
for your clothing or a thing used upon your farm 
which is not made to-day with a tenth part of the labor 
cost of forty years ago, yet the trusts, with the aid of 
the tariff, are charging you at least fifty per cent, more 
for these articles than they should. The theory of the 
early protectionists in this country was that protection 
against imports, while it might temporarily raise the 
price of the goods protected, in the long run, by in- 
creasing home competition, would tend to lower prices. 
The trust, however, sprang up to destroy the home 
competition, and holds up the price of the necessaries 
of life to the full extent that the duty permits. None 
of you farmers in this country ever get a penny's value 
out of a protective tariff, and besides wronging you as 
consumers it tends to destroy foreign markets for your 
produce. 



A TALK WITH FARMERS 223 

First. Protective duties upon your products are 
imposed simply to deceive you, and cannot bring bene- 
fit to you because about one-third of your product must 
be exported. 

Second. Protective tariffs tend to lessen exports 
and the tariff which is imposed for the benefit of the 
manufacturer shuts in your grain. 

In 1875 you farmers exported 76.95 per cent, of the 
total exports of the United States; in 1885, 72.96 per 
cent.; in 1895, 69.73 per cent; and in 1905 about 56 
per cent. For thirty years the amount of your annual 
crops have been the invariable test of the prosperity of 
the country. Little is said in newspapers about you as 
exporters, while a great deal of noise is heard over the 
export of manufactured products; but if our country 
has been prosperous, it is due more to the large pro- 
ductions of our farms than to all other sources com- 
bined. The important fact for you to observe is this, 
that in the operation of the general law of trade the 
part of your product exported and marketed abroad at 
the greatest cost and disadvantage to you fixes with 
unvarying certainty the price of the remainder of the 
product which you sell in your own country. This is 
true as a general proposition, and is absolutely true of 
your exported surplus, but it is not true of the product 
of the manufacturers because they are sheltered from 
foreign competition by an import duty and combine to 
maintain the price of their product sold ^t home up to 



224 THE TARIFF AND THE TRUSTS 

the duty line. Because the number of manufacturers 
is comparatively small and their interests are closely 
allied, they can easily establish trusts and in that way 
control the price of the domestic product, but you are 
so widely scattered that it is not practicable for you. 
The result is that the price of the portion of your prod- 
uct sold to your own countrymen is absolutely fixed by 
the price of the surplus exported and sold in the grain 
pits of Europe. A protective duty, as a rule, is of no 
value to an exporting industry; so, when our manu- 
facturing interests became able to export, they formed 
trusts and controlled the competition here so as to be 
able to sell goods at home at prices increased by the 
amount of the duty. 

Now, although duties upon foreign grain imported 
into this country can be of no value to you because you 
are exporters, yet Congress has imposed heavy duties 
upon wheat and all the other products of agriculture. 
On September 25 of 1905, Senator Foraker, of Cincin- 
nati, spoke at Bellefontaine in the State of Ohio, and 
in his speech he said : ^'We have a high duty on wheat, 
corn, rye, oats, barley, potatoes, butter, eggs, milk, 
cattle, horses, sheep, hogs, wool, and everything else 
the farmer produces. I have no doubt but, for a sub- 
stantial reduction of these commodities or some of 
them, a reciprocity treaty could be arranged with 
Mexico and with Great Britain as to Canada and with 
still other countries; but I do not need to state, for 



A TALK WITH FARMERS 22$ 

everybody knows it without stating, that the farmers 
of Ohio and the whole country would be hostile to 
such a treaty." Such talk as that from public men is 
simply insulting to your intelligence. Senator 
Foraker, when he uttered those words, knew that not 
one of the products mentioned except wool received 
substantial protection from the duty imposed. These 
words illustrate better than anything I can say to you 
the deception which has been practiced upon the farm- 
ers of this country for forty years. Although you 
produce the greatest amount of wheat of any country 
in the world, and in 1902 exported $177,000,000 worth 
of wheat and flour, they have given you a duty upon 
imported wheat of 25 cents per bushel, and the con- 
gressmen who imposed that duty knew that you would 
never realize a single penny from it. It is simply im- 
posed to allow campaign orators to declare before you 
that your products are highly protected. No one im- 
ports or wants to import wheat into our country unless 
it be the farmers of Manitoba and the western provinces 
of the Dominion of Canada, who would like to send 
their wheat to the great flouring mills of Minneapolis 
to be ground. If you will examine the matter, you 
will find that practically all the wheat that comes into 
the country is from that source. They give you a duty 
of 15 cents per bushel on corn, and you raise more corn 
than any other two countries in the world. You ex- 
ported in 1900 over $85,000,000 worth of corn, and 
15 



226 THE TARIFF ANP THE TRUSTS 

such a thing as the importation of corn in any quantity 
into this country has never been known. The con- 
gressmen knew it when they imposed the duty, and it 
was put on simply as a means of flattering and de- 
ceiving you. The Dingley Bill imposed a duty of $30 
per head upon imported horses and mules valued at $150 
or less per head, and if valued over that amount 25 per 
cent, ad valorem in addition thereto. Now see the un- 
justifiable character of this duty. In the census of 
1900 it appears that in the United States, exclusive of 
horses used in cities and towns, there are 18,280,000 
horses and more than 3,000,000 mules. In all the 
German Empire there were in that year only 4,184,000 
horses, and in all France only 2,903,000 horses, and to 
protect you, the owners of about 18,000,000 horses 
and 3,000,000 mules, against the danger of importa- 
tion they impose this duty. Was ever such a humbug 
perpetrated? You know and they knew that there 
would be no importations of horses except possibly a 
few blooded animals brought into the country for 
breeding purposes. Senator Foraker tells you that 
you have a protective duty against the importation of 
hogs. Does the American hog need protection from 
the foreign hog when our hogs have been rooting their 
way all over the earth for the last twenty years, and 
during the same period at home have been furnishing 
an example to those who seek tariff benefits by their 
pig-trough action? We are the greatest exporters of 



A TALK WITH FARMERS 22/ 

pork in the world, and the importation of dead hogs 
into this country, even if there were no duty on pork, 
would be about as rare as white blackbirds, yet your 
benevolent congressmen have carefully protected you 
against the importation of pork by a duty of 5 cents a 
pound on bacon and hams. Once eggs were free, 
but your thoughtful congressman, humiliated at his 
oversight, repaired the wrong, imposing a duty upon 
eggs of 5 cents per dozen, and now the business of 
producing eggs is securely sheltered from the danger 
that some Canadian will bring a basketful across the 
border. Upon potatoes they have given you a duty 
of 25 cents per bushel, and upon hay $4 per ton, yet 
you produce more of either one of these products than 
any other country in the world, and under no circum- 
stances would they be imported in any considerable 
amount. I might continue and discuss each one of the 
farm products mentioned by Senator Foraker, but why 
should I treat this matter seriously? Is there an in- 
telligent farmer in the United States who does not 
know that such talk is simply humbug? Such state- 
ments of public men are simply ridiculous, and show 
the contempt which they have for the intelligence of 
their hearers. The only way in which government 
can protect you is by giving you direct bounties upon 
the amount of your exports of agricultural products 
in just the same manner that the French, German, 
Austrian and Italian governments treated their sugar 



228 THE TARIFF AND THE TRUSTS 

growers and exporters for about twenty years. For 
many years Mr. David Lubin, of San Francisco, trav- 
eled over the country addressing you farmers and 
urging you to seek such bounties upon your agricul- 
tural exports. He appeared before Congressional 
Committees urging that our protective tariff put many 
burdens upon you, that you received no benefit there- 
from, and that you were entitled equitably to bounties 
upon your exports, but the Ways and Means Com- 
mittee, knowing that you would not furnish funds for 
national campaigns, treated your representative with 
scant courtesy and refused even to report a bill. 

While Congress has imposed duties upon the very 
products which you excel the world in producing and 
which they knew could be of no value to you, they have 
been very careful to impose a duty of 12 cents per one 
"hundred pounds upon salt in bags, sacks, barrels or 
other packages. But in order to care for the Gloucester 
fishermen, the constituents of Senator Lodge, and the 
meat trust, under the guardianship of all the Con- 
gressmen from Illinois and especially his Honor, the 
Speaker, they have exempted from the effect of this 
tax the salt imports in bond to be used in curing fish 
and curing meats for exportation. It would be of 
great value to you who are fruit and vegetable grow- 
ers if your surplus could be canned cheaply. With 
cheap sugar these would be a source of profit. Cheap 
tin and cheap glass are also essential to profitable can- 



A TALK WITH FARMERS 229 

ning. But Congress has imposed duties on sugar of 
75 to 100 per cent., on tin plate, 80 per cent., and on 
glass 60 per cent. 

Now, it will aid you in determining why high tariff 
duties are unnecessary in this country and surely un- 
necessary to you to see the reason why you lead the 
world at present in the production of grain and other 
agricultural products. You farmers, according to the 
census of 1900, have 841,201,546 acres of land in your 
farms. It is divided into 5,739,657 separate farms, 
averaging a little more than 145 acres each. Your 
farms alone cover an expanse six times larger than the 
whole area of France. In France, according to the 
agricultural statistics of 1892, there were 5,702,000 
farms, almost exactly the same number as you possess 
in the United States, but their average size was less 
than twenty acres, instead of 145 acres. The average 
size of the Western farm is a little over 386 acres, and 
the average value of the farm lands in the United 
States, according to the census of 1900, is a little less 
than $25 per acre, while the average value of farm 
lands in Europe is probably three times that amount. 
Now, you lead in agriculture for several reasons. Your 
farms are extensive compared with those of European 
countries and therefore each of you can afford to use 
mowing-machines, reapers, and other labor-saving 
machinery to a much greater extent than they can in 
Europe. Again, for fifty years you have been ex- 



230 THE TARIFF AND THE TRUSTS 

tending your wheat farming in the Western states to 
new lands. This virgin soil continues to produce for 
several years in succession good crops of the same 
kind without demanding manures like older land. 
Your competitors in Europe, however, are obliged to 
use fertilizers every year at considerable expense. 
Again, they are farming lands worth from $75 to $100 
an acre, while the average value of your farms is only 
$25 an acre. You make extensive use of horses and 
mules, but a horse is a rare sight in many parts of 
Europe. The traveler in the Tyrol is frequently obliged 
to send four or five miles to procure a horse for a day's 
travel over the mountains. The number of your horses 
and mules is about equal to those of all Europe outside 
of Russia. The greater part of the farming of Europe 
is carried on by hand labor. Everywhere you see men 
and women mowing the grass with scythes and cutting 
the grain with sickles. Although you pay much high- 
er wages for your help, still, to a great extent, the day's 
wage you pay, measured by the amount of production, 
is cheap compared with that of European laborers. 
On June 25, 1902, the Hon. Jacob H. Gallinger, 
United States Senator for New Hampshire, said in 
the Senate : "As regards power of production, Mulhall 
has shown that a farm hand in the United States does 
as much as two in the United Kingdom, three in Ger- 
many, five in Austria, and seven in Russia. The farm 
laborers of Europe do nine times the work to get 



A TALK WITH FARMERS 23I 

double the result of the farm laborers in the United 
States. That is, it takes four and a half Europeans 
to equal one American. Extend the comparison to 
Asia and Africa and we find that the average United 
States producer is equal to ten the world over, outside 
of our own country. This comparison is emphasized 
by our coal consumption and steam power, and finally 
by our products of manufacture." You pay your farm 
laborers higher wages than are paid in Europe simply 
because they earn more than is earned by similar labor 
in Europe. This element, together with the demand 
and supply of labor, absolutely fixes the prices. The 
tariflf has nothing to do with the matter, and the tariflf 
at every point operates against you. 

Let us examine another feature of the injury of the 
tariflf to you. The 3)rotective tariff on imports tends 
to destroy foreign markets for your surplus, and thus 
to reduce the price at home. A sale by you of your 
surplus produce to people in any other country, when 
reduced to the last analysis, is but an exchange of 
products between you and the foreign exporter. This 
is not so apparent, because you sell your grain directly 
to the exporter. Money Is but the medium of bringing 
about an exchange between your wheat and the manu- 
factured goods of the foreigner. If the goods for 
which you have exchanged yours can enter our coun- 
try only by payment of high duties, we have an ob- 
struction to trade which will reduce the foreign de- 



232 THE TARIFF AND THE TRUSTS 

mand for your product and so lower its market value: 
here. President McKinley's last words at Buffalo con- 
firm this contention. You will remember he said : ''A 
system which provides a mutual exchange of com- 
modities is manifestly essential to the continued and 
healthful growth of our export trade. We must not 
repose in fancied security that we can forever sell 
everything and buy little or nothing. If such a thing 
w^ere possible it would not be best for us or for those 
with whom, we deal.'' Shut out a foreign staple prod- 
uct by prohibitive duties and you shut in a staple 
product of the farms. There is abundant evidence in 
our history to show this. The period between 1846 
and i860 in this country was one of comparatively low 
duties. An average tariff duty on all dutiable imports 
of 24 per cent, prevailed from 1846 to 1857, ^^d of 
about 19 per cent, from 1857 to 1861. Under these 
fourteen years of low tariffs our imports of merchan- 
dise increased from about $117,914,400 in 1846 to 
$353,616,000 in i860, most of the increase being in 
European products. This was an increase at the rate 
of 200 per cent, in fourteen years. Now notice that 
during the same period our exports increased from 
$109,583,000 in 1846 to $333,576,000 in i860, an in- 
crease of 204 per cent., the increase of exports keeping 
a little more than even pace with the increase of im- 
ports. Twenty-eight years after, at the same ratio of 
increase as between 1846 and i860, our exports ought 



A TALK WITH FARMERS 233 

to have been about a billion and a half or two billion 
dollars, but in 1888 they were only $695,954,000. This 
was due to the increased duties. As foreigners will 
not and cannot send us anything unless we sell to them 
an equal value in American products, it is easy to see 
why our exports have been so greatly reduced. Our 
experience from 1846 to i860 showed that exports 
kept pace with imports, and that the one increased as 
fast as the other. Under the high protective tariffs 
that commenced in 1864 our exports shrunk about as 
much as our imports. The present annual loss to 
American exporters, brought about by the protective 
tariff, is a diminished sale of at least a billion dollars a 
year. More than half this loss falls upon you farmers 
and planters, since considerably more than half of our 
exports consist of your products. Here is a terrible 
burden placed upon you. You are losing this year and 
every year regularly by reason of the tariff customers 
to the value of at least $400,000,000, of which sum a 
considerable per cent, would be profit. You are cut 
off from this profit simply because the great trusts 
have imposed, through Congress, duties running from 
30 to 250 per cent, on foreign articles competing with 
their products. They simply shut out their competing 
products and shut in your products. Am I not right 
in saying that everyone plucks some of your wool ? 

Six years ago the late John Hay, Secretary of State, 
speaking upon political issues said: "We pay the 



234 THE TARIFF AND THE TRUSTS 

highest wages which are paid in the world; we sell 
our goods to such advantage that we are beginning to 
furnish them to every quarter of the globe. We are 
building locomotives for railways in Europe, Asia, and 
Africa; our bridges can be built in America, ferried 
across the Atlantic, transported up the Nile, and flung 
across a river in the Soudan in less time than any 
European nation, with a start of 4,000 miles, can do 
the work. We sell ironware in Birmingham, carpets 
in Kidderminster; we pipe sewers of Scotch cities; 
our bicycles distance all competitors on the Continent ; 
Ohio sends watch cases to Geneva. All this is to the 
advantage of all parties ; there is no sentiment in it ; 
they buy our wares because we make them better and 
at lower cost than other people." Now, if we make 
all of these articles at so much lower cost than the 
foreigner that we can afford to export them to him 
in all parts of the world, is there any doubt about the 
fact that we do not need a tariff to protect our manu- 
facturers against the same articles imported from 
foreign countries? You have been feeding the world 
for the last thirty years by the irreparable loss of the 
virgin fertility of your soil, while the manufacturers 
have been denying you the right to obtain the best 
value the world has to offer in exchange for your food 
supplies. Not only this, but when you go to market 
you have the privilege of paying the United States 
Steel Corporation about one-quarter more for a keg 



A TALK WITH FARMERS 235 

of wire nails than the same nails are sold abroad. You 
pay at the hardware store at least a quarter more for 
a coil of barb wire than the foreigner does for the 
same wire. You not only pay a heavy duty on raw 
sugar, but on every hundred pounds of sugar you buy 
you pay I2j4 cents additional price for refining the 
sugar, this last exaction going to the trust alone and 
being more than the entire cost of refining. You pay 
to the glass trust and the pottery trust for every piece 
of glass and pottery you buy all the way from 50 to 100 
per cent, more than you would pay but for the tariff. 
In short, you have to hoe your row alone without pro- 
tection or privilege from government but you pay 
dear for the hoe, you pay dear for the plow, you pay 
dear for the Paris green and for every chemical you 
need. The United States Steel Corporation, the 
borax trust, the white lead trust, the lumber trust, all 
these trusts, protected by high tariffs, combine to filch 
your hard-earned money in ways so hidden and de- 
ceptive that it is hard for you to follow them. There 
is not an article of the clothing of your family which 
does not pay tribute to the trust. There is scarcely 
an item in your grocery bill that does not include a tax. 
The furnishings which make your house a home, the 
windows that give you air and light, the books and 
papers that you read, every piece of wire and steel and 
every nail you buy are instruments of their extortion. 
Death itself inspires no sanctity on the part of these 



236 THE TARIFF AND THE TRUSTS 

trusts. They take toll from your coffin, tax the plumes 
and the varnish on the hearse that bears you to your 
grave, levy tribute on the spade that digs your grave, 
and then stretch forth a greedy hand beside your tomb- 
stone and gather from your estate an increased price 
for it of fifty or sixty per cent. Moloch himself would 
be more merciful to you than Mammon. You pay 
taxes for an army or navy sent to China or the Philip- 
pines to secure an open door abroad, and then your 
representative in Congress closes your own door to 
cheap necessaries of life at home. While you are 
paying the increased price which makes the tariff of 
great profit to the manufacturer at home, he is selling 
the same goods in European countries for twenty to 
fifty per cent, less than he is selling them to you. In 
short, each and every one of you furnish the money 
for a bounty to the manufacturer that enables him to 
be generous to foreigners. The manufacturer will 
tell you, through his paid agent, that thus he is able 
to run his factory the whole year, and if he could not 
tax you at home he would have to shut up his factory 
at the end of eight months, and that he has to sell his 
product abroad for less than the cost price of manu- 
facture. But how can you possibly be sure that he 
does sell it abroad for less than it costs him to manu- 
facture it? And if it is true, ought the trust to be 
allowed to impose a private tax on home consumers to 
recoup such a loss? Trusts are in control of the 



A TALK WITH FARMERS <^Z7 

whole production of the country, and you must pay 
their prices or starve. You live in a democratic form 
of government, and are supposed to be our rulers, but 
I can name five trust magnates, with abundance of 
money and little scruple, who actually wield more 
power over the action of government through the 
bosses of political machines than any five millions of 
you good-natured farmers are able to exercise. Has 
not the time come for somebody to get mad? When 
you are no longer indignant at such injustice and 
wrong, when you placidly submit to extortions on the 
part of great combinations controlling the industries 
of life, when you show a kind of an admiration for 
great wealth obtained through injustice and corruption, 
and forgive the men who get it because they give a 
small portion of it to charity, when you vote the 
straight Republican or the straight Democratic ticket 
blindly, notwithstanding that the one party openly and 
the other secretly connive with the owners of the trusts 
to aid them in robbing you, when all these things go 
on for forty years and men do not get mad, then free 
government is indeed endangered. The politicians 
simply cheat you with the empty appearance of political 
power when the substantial blessings of life are taken 
from you by the laws they make. How much longer 
will you continue to approve this oppressive law which 
bestows your property upon favorite trusts? You 
simply pay the money which you need to people who 



238 THE TARIFF AND THE TRUSTS 

do not need it, and you have been doing it so long, and 
it has become so much a matter of second nature with 
you, that you really seem to enjoy being fleeced. You 
may boast of your political rights, but I tell you frank- 
ly that no body of men was ever put into bondage by 
tyrants so petty, so cheap, and so pitiless. The in- 
herited predatory tendency of strong and unscrupulous 
men to seize upon the fruits of other people's labor can 
only be checked when the victims of the robbery are 
sufficiently indignant at the injustice to exert all their 
power to vindicate their rights. 

In each campaign the political speakers tell you that 
the Englishman and the German object to our protect- 
ive tariff, and that it follows conclusively that they 
lose by it and that you are helped by it. Fine logic 
this, that because the people of a foreign country ob- 
ject to the injustice of our laws therefore they must 
benefit you. They tell you that you have to compete 
with the cheap pauper labor of Europe and that you 
need protective duties upon your products to repay 
you for the diflference between the price of labor in 
this and in European countries. I have called your 
attention above to the words of Senator Gallinger 
which, if true, show that you do not overpay your 
laborers. Between 1870 and 1880 the self-binding 
harvester came into use. Before that invention you 
employed six or seven men to each harvester to tie the 
sheaves of wheat. After its completion you were able 



A TALK WITH FARMERS 239 

to discharge at least five of the number. You attach 
ten or twelve plows to a steam traction engine and 
plow up the prairie while your competitor in Egypt 
or India is scratching the ground with a mere stick. 
You thrash your grain with steam thrashers as fast 
as you gather it, while your competitor abroad is driv- 
ing horses over the thrashing floor to shell out the 
grain. With all the marvelous inventions in agricul- 
tural machinery which enable you to undersell your 
competitors in every market of the world, your ma- 
chines still do not attain the efficiency of those em- 
ployed by the manufacturer. If you can undersell 
your competitors, he certainly can undersell his in the 
foreign markets. There never was so foolish a cry 
as that against competition with pauper labor. The 
Frenchman cries out, ''Protect us from the imports of 
German woolen goods and iron ;" and the German cries 
out, 'Trotect us from the imports of French woolen 
goods and iron ;" and the American, with better oppor- 
tunities for cheap manufacture than either, cries out, 
"Protect us against French and German woolen, iron 
and steel ;" and the German, Frenchman, Japanese and 
Chinaman all cry out together, ''Protect us from the 
high-priced labor of the United States." Do you not 
see at a glance that some of them must be mistaken? 
Do you not appreciate, in view of these facts, that 
such arguments for protection are simply an aggrega- 
tion of contradictions, a bundle of sticks — inconsisten- 



240 THE TARIFF AND THE TRUSTS 

cies — which taken one by one are easily broken? Our 
home producers who are able to meet competition on 
equal terms abroad must necessarily have already be- 
come assured at home without the artificial aid of a 
tariff. 

''But/' say the protectionist orators, "has the world 
ever seen such marvelous prosperity as we enjoy in 
the United States ?" Surely we ought to enjoy marvel- 
ous prosperity. What country ever had such natural 
resources ? Where else in the world can you find over 
fifty states with a territory of more than three million 
and a half square miles in area enjoying absolute free- 
dom of commerce with each other? The Continent 
of Europe is divided into more than twenty separate 
states with customs lines obstructing trade running 
between each and every one of them. The prosperity, 
however, which this country enjoys is the prosperity of 
a few who are the beneficiaries of the tariff. A pros- 
perity where the whole profits are held in a few hands 
has a kind of a tired look. The question for you farm- 
ers to ask yourselves is, ''Who makes the tariff and 
who pays for the tariff;" and if you will ask your- 
selves that question and reflect upon it a little while, 
you will come to but one conclusion, and that is that 
the tariff is made by a few men who have seized con- 
trol of the manufactures of the country and that you 
pay the bills. Are any of you farmers becoming mil- 
lionaires ? Do you know of any farmer in the United 



A TALK WITH FARMERS 24I 

States who is worth a million and who made it in 
farming? If government keeps on protecting you as 
it has for the last forty years, it will protect you off 
from the face of the earth. If, as the protectionists 
teach, the ships of commerce bring to our shores com- 
mercial destruction, why not have Congress pass laws 
to close our ports or burn our ships, which would prove 
more effective in destroying commerce than a portect- 
ive tariff? Do not think I am exaggerating in point- 
ing out such a remedy. The German farmers recently 
have carried the protective craze just as far as I sug- 
gest. The German Emperor was anxious to connect 
the Rhine and the Elbe rivers by a canal. The canal 
would pass through the State of Prussia, and the act 
providing for its construction came up before the 
Prussian Landtag. The agricultural party known as 
the Agrarians defeated the bill providing for the build- 
ing of this canal because it would bring your grain to 
Berlin and the western part of the German Empire 
and make your competition the more effective against 
the sale of German grain. If the exchange of products 
between the United States and Canada brings evil to 
both parties, then the exchange of products between 
the fruit-grower in California and the ironmaster of 
Pittsburg is all wrong. Commerce between adjoin- 
ing people is everlastingly right, and the world has 
never produced an example of its signal benefits so 
striking as our fifty states and territories with abso- 
16 



242 THE TARIFF AND THE TRUSTS 

lute free trade between them. In 1846 Congress passed 
what is known as the Walker Tariff. You will find a 
full description of it in a subsequent chapter on the 
history of our tariffs. The duty from 1846 to 1857, 
as stated above, did not exceed 25 per cent. In 1857 
the average ad valorem duties were reduced to about 
19 per cent., and continued thus till 1861. The fol- 
lowing tables will show you the results of that tariff as 
it affected farming, and also the effect of the subse- 
quent protective tariff of about 50 per cent. 

Value of Farm Lands 

1850 i860 1880 

$3,271,575,421 $6,645,045,007 $10,197,096,776 

Increase for ten years (1850 to i860) 3,373,469,586 

Increase for twenty years (i860 to 1S80) 3,553,051,769 

Yearly rate of increase (1850 to i860) 337,346,958 

Yearly rate of increase (i860 to 1880) 177,602,588 

Per cent, of yearly increase (1850 to i860) 10^2 

Per cent, of yearly increase (i860 to 1880) 25^ 

The average value of our improved land was $11 per 

acre in 1850 and $16 in i860, an increase in the ten 

years of $5 or 45 per cent, in the decade. Its value 

was $19 per acre in 1880, an increase of $3 in twenty 

high tariff years or 9 per cent, each decade. Before 

i860 the annual increase in value per acre was fifty 

cents, between i860 and 1880 it was only fifteen cents. 

The total acreage in farms at the three different periods 

was as follows: 

1850 i860 1880 

293,560,614 407,212,538 536,081,83s 

Increase 113,651,924 128,869,297 

Yearly increase 11,365,192 6,443,468 



A TALK WITH FARMERS 243 

Now remember that between 1850 and i860 the country 
had not yet been opened up by railways to any such ex- 
tent as between i860 and 1880, and yet the growth in 
the wealth of the farmer was more rapid between 1846 
and i860 than during any other part of our history. 
The price of wheat rose from an average of $1.02 in 
1845-1847 to $1.51^^ from 1848-1856, a price never 
equaled before or since. Corn, cotton, butter and 
wool increased about 33 1-3 per cent, in price during 
the existence of the Walker Tariff. The year i860 
was the most prosperous year in the history of the 
country up till that date and the prices of the necessa- 
ries of life were lower during that period than they are 
to-day. No better illustration of the benefits of free 
trade for an exporting farming people can be found in 
the world than the tiny Kingdom of Denmark. The 
Danes impose no duties upon agricultural products, 
meats, or dairy products. In the year 1902 the people 
of Denmark exported $80,500,000 worth of dairy prod- 
ucts, meat, and other agricultural products, and this 
$80,500,000 was $35 per head for each of its population. 
A Danish writer, Mr. R. A. Westenholz, in an article 
in 1903 in the Monthly Review points with justifiable 
pride to the fact that even the farmers of the United 
States export only half that sum. 

The protectionist orator, however, will say to you, 
"Look at the condition of this country during the 
period of the Wilson Tariff." Look at it, and be sure 



244 'r^E TARIFF AND THE TRUSTS 

you look at it, for that tariff is an example of the power 
o£ great monopolies to corrupt Senators whose party- 
had pledged itself to care for the people's inter- 
ests and to relieve them from the burdens of a high 
protective tariff. I shall discuss that tariff in the 
chapter on Our Tariff History and show that the 
condition of depression at that time was the result of a 
combination of causes other than the tariff. The ex- 
tremely low price of wheat before the passage of that 
tariff and after its passage had a hundred times more 
to do with the stoppage by financial depression of the 
sale of manufactured goods than the slight change in 
the schedules. You represent nearly one-half of the 
people in this country, and when the returns from your 
business are small the amounts which you purchase 
are also small. Every sagacious financier knows full 
well that business depends very largely upon your suc- 
cess, and for this reason the cotton and produce brok- 
ers bribe the men who are making the reports upon 
cotton and wheat to procure the estimates in advance 
for the purposes of speculation. The protective super- 
stition ascribes all prosperity to governmental action, 
and misleads the people into believing that the in- 
creased prosperity of the favored few is the prosperity 
of all. Protective tariffs, according to these gentlemen, 
stimulate into activity the inventive genius of the peo- 
ple, lengthen the wool upon the sheep's backs, people 
our great Republic with millions, send the great rivers 



A TALK WITH FARMERS 245 

coursing through fruitful valleys, and bring blessings 
to everybody. How much longer are you going to 
believe these ridiculous tales? 

Nature provided in this United States the noblest 
heritage ever given to men. Originally we had about 
1,880,000,000 acres of farm land. The original idea 
of the fathers of the country was that this land should 
be held for all the citizens who were willing to make it 
their home and to till it; 1,226,000,000 acres of this 
land was west of the Mississippi River. One-third to 
two-fifths of it is barren land or deserts, and of the 
800,000,000 of acres remaining more than a ninth part 
has been given away by government to great railroad 
corporations as a bounty for constructing railroads 
through the country. The process of the selection of 
this land by the railroads has been going on from year 
to year, and they have taken in the neighborhood of 
150,000 square miles of the agricultural, mining and 
timber lands west of the Mississippi, a territory larger 
than the whole of Great Britain. These railroads own 
some of the best lands through which they run, hold 
mortgages upon many of your farms, and control mat- 
ters generally in your part of the country. Have you 
had enough of this? Are not your sons and daughters, 
discouraged with the results of the farm, leaving their 
homes by the hundreds for the city? The history of 
mankind shows no single instance of a people that 
deserted the lands and flocked to the cities long con- 



246 THE TARIFF AND THE TRUSTS 

tinuing free. The railroad corporations that own these 
vast tracts of land absolutely control your means of 
sending your products to market, and, as you well 
know, they charge you prices for the shorter hauls 
which, when compared with the charges to your more 
powerful competitors, are in violation of the statute. 
Are you so well satisfied with this railway monopoly 
as to wish to continue the monopoly of protective 
tariffs and trusts? 

England a hundred and fifty years or more ago 
granted a charter to the old East India Company giv- 
ing it the right of exclusive trade with the people of 
India, which meant that this company had a legal right 
to fix the prices of the necessaries of life sold to those 
people. England was not under the same obligation 
which our government owes you to protect you from 
the predatory raid of a monopoly, but England made 
that East India Company pay her $2,000,000 annually 
for that exclusive right, and limited that right to grants 
of fifteen years. The beneficiaries of our protective 
tariff have enjoyed the advantage of exacting an in- 
creased price for the necessaries of life from the whole 
American people for upwards of forty years, and now 
they claim a vested right to continue it. It is not a 
vested right ; it is a vested wrong. When we ask Con- 
gressmen to do us justice and reduce these outrageous 
tariffs, they go around saying to each other, "Keep 
quiet, don't discuss the question, stand pat." "No 



A TALK WITH FARMERS 247 

party/' says Secretary Shaw, ''can ever revise the tariff 
in safety, and the only time to risk the experiment is 
at an extraordinary session immediately following the 
inauguration of a new administration." This answer 
shuts out hope and shuts in despair unless you and I 
and our fellow-countrymen demonstrate that we have 
a little something to say about the laws of this country. 
Such an injustice as our tariff has the moral law of the 
universe against it. If we continue to submit to this 
injustice, we are unworthy of free government. The 
monopolistic giants which thrive on protection will 
never remove the burdens from the people until a pop- 
ular movement arises among the people entirely out- 
side of both political parties which will drive the 
emissaries of the trust from public office. Men do not 
relinquish special privileges which yield them millions 
without a terrific battle. But if our institutions are 
to be preserved, if our flag is to be kept flying over free 
men, if justice, the abiding source of good government, 
is to exist, this tariff, with bag and baggage, must go. 



CHAPTER VIII 



OUR TARIFF HISTORY 



During the period of our colonial life colonies in 
general were considered as the exclusive property of 
their sovereign state and they were allowed no com- 
mercial intercourse with other nations. This policy 
was adopted by Great Britain in her relations to her 
American colonies. In 1701 the charter colonies were 
reproached by the lords of trade ''with promoting and 
propagating woolen and other manufactures proper to 
England." From the furs of the country hats were 
made and the London hatters procured an act forbid- 
ding hats to be transported even from one plantation 
to another. The manufacture of charcoal iron was 
our leading industry. So plentiful was the ore and 
so cheap was wood that the industry was thus early 
established notwithstanding England's attempts to limit 
it. The iron masters of England clamored for Parlia- 
ment to check our manufacture of leather and iron. 
The House of Commons passed a bill providing that 
"none in the plantations shall manufacture iron wares 
of any kind out of any sows, pigs or bars whatever." 
England not only attempted to control the trade of 

248 



OUR TARIFF HISTORY 249 

the American colonies, but through her tariffs crushed 
out the flourishing linen and woolen industries of 
Ulster in Ireland, and as a result thousands of Scotch- 
Irishmen emigrated from that province to America. 
Between 1730 and 1770 more than half of the Pres- 
byterian population of Ulster came to America, where 
it formed more than one-sixth part of our entire popu- 
lation at the time of the Declaration of Independence. 
The descendants of these men to-day control the great 
iron and coal industries of Pennsylvania, and Penn- 
sylvania in 1785 was the first one of the states of the 
Federation to impose protective duties against sister 
states. The ancestors of the present millionaires of 
Pittsburg however were modest. They imposed duties 
of only 2^ per cent. ; a hundred and twelve years later 
their descendants induced Congress to pass the Dingley 
Bill imposing duties all the way from 50 to 150 per 
cent, to protect their infant industries from foreign 
competition. 

The great work of Adam Smith on the "Wealth of 
Nations" was published in 1776, yet in 1756, twenty 
years before it appeared, the iron manufacturers of 
Great Britain, in a petition to Parliament, asked that 
the colonies be allowed to export iron products to 
England, and the reasons which they set forth in their 
long petition embodied the theory of commerce which 
Adam Smith thereafter set forth in his great work. 
The manufacturers in those days purchased their iron 



250 THE TARIFF AND THE TRUSTS 

of the iron masters, and it ought to be a matter of in- 
terest to our manufacturers to-day to examine this 
opinion given a hundred and fifty years ago as to the 
wisdom of having free raw materials for manufacture. 
A few out of the many reasons given by these iron 
manufacturers for granting their petition are found in 
the following quotation : 

"I. There cannot be a clearer Proposition concern- 
"ing Trade, than, That it is the Interest of every Manu- 
"facturing Country to get as great a Choice and Variety 
*'of raw Materials, and upon as cheap Terms, as can 
"possibly be procured. For an Error in this respect, 
*'is fundamental, and hardly to be corrected by any 
^'subsequent Care or Diligence. Therefore the Legis- 
''lature hath wisely ordained. That though Wool, for 
^'Instance, grows in greater Plenty in England than 
^'perhaps in any other Country, yet the Wools of all 
"Nations shall be admitted into England Duty-free; 
"justly considering. That we can never have too great 
"a Choice and Plenty of that necessary Material of 
"extensive and profitable Industry, or upon too cheap 
"Terms. 

"II. A Second Proposition, not inferior either in 
"evidence or Importance is, That unless some Com- 
"modities are taken from other Countries by Way of 
"Barter in the Course of Trade, You can have but a 
"small Vent for your own Manufactures ; it being im- 
"possible for any Nation to make all their Payments in 



OUR TARIFF HISTORY 25I 

''Gold and Silver, even if they abounded v^ith the rich- 
"est Mines of those Metals. Nay, though it were pos- 
*'sible, it may be greatly questioned. Whether it is not 
''for the Interest of a Manufacturing Nation to import 
''sometimes rav^ Materials by v^ay of providing for the 
"future Industry of their People, than to be always 
"importing Gold and Silver; which, when they come 
"to be unconnected with Labour and Industry, (as in 
"this Case they would soon be) have no other Effect, 
"than to introduce Laziness, Vanity and Extravagance. 
"And in the End Poverty. 

"III. A third Proposition, by way of Preliminary, 
"is this. That Cheapness in regard to Price, and Good- 
"ness in regard to Quality, are the Support and Prop 
"of all Manufactures : And that it is impossible, in the 
"Nature of Things, for a Nation to preserve any 
"Manufacture, if they strike off, or suffer to be struck 
"off, these two grand Pillars, Cheapness and Goodness. 
"They may indeed tamper for a While ; and seem to do 
"something, not unlike a Quack in Physic, towards 
"botching up a broken Constitution; but it will soon 
"appear, that all they have been doing, was only to 
"make bad worse." The principles here laid down 
guide most protective countries in the making of their 
tariff's to-day. We almost alone of all the people in 
the world continue to tax the raw materials of manu- 
facture and thus make it difficult for our manufacturers 
to compete with the rest of the world. 



252 THE TARIFF AND THE TRUSTS 

Franklin, Jefferson, and Madison all desired free 
trade between England and the Confederation which 
preceded our present government. In 1783 William 
Pitt, who approved the doctrine of Adam Smith, in- 
troduced into the English Parliament a bill that would 
have secured free trade between the countries. Had 
it passed, the hard feelings which occasioned the war 
would soon have died out and the commercial progress 
of both countries would have been promoted and the 
War of 1 8 12 probably would have been prevented. The 
Confederation did not reserve to itself the control of 
commerce between the different states, and, following 
Pennsylvania's example, other states passed laws im- 
posing duties upon imports not only from foreign 
countries, but from the other states of the Confedera- 
tion. The State of New York from its earliest times 
had sought to foster trade by legislation. Stephanus 
Van Cortlandt, the first Mayor of New York born in 
the city, enacted many rules and regulations to protect 
trade. Even the quantity of brine in which the farmer 
might immerse his pork was minutely prescribed and 
all prices w^ere fixed by ordinance. New York natu- 
rally was the first state to follow the lead of Pennsyl- 
vania, and in 1785 she also passed a tariff act. The 
city then had a population of 30,000 people, and had 
long been supplied with fire-wood from Connecticut 
and butter and cheese, chickens and eggs from New 
Jersey ; but the wise fathers of those days believed that 



OUR TARIFF HISTORY 253 

in trade as well as in gambling what one man gained 
the other man lost. Acts were accordingly passed 
obliging every Yankee sloop which came down from 
Hell Gate and every Jersey market-boat which was 
rowed across from Power's Hook to Cortland Street 
to pay an entrance fee and obtain clearance at the 
custom house, and the people of New York could not 
get a load of wood from Connecticut or a dozen hen's 
eggs out of New Jersey without paying a duty thereon. 
The City of New York had bought a piece of ground 
on Sandy Hook and had built a lighthouse there, and 
New Jersey retaliated by levying a tax of $1800 a year 
on the lighthouse property. The people of Connecti- 
cut suspended all commercial intercourse with New 
York. A great meeting of business men was held at 
New London, and every merchant signed an agree- 
ment, under penalty for the first offence, not to send 
any goods whatever into the hated state for a period 
of twelve months. This was our first tariff war. 
Will the next one be with Germany? 

Many protectionists regard Alexander Hamilton as 
the father of our protectionist policy, but they cannot 
find in any word or in any act of his a justification of 
our existing tariff. The people of the United States 
in the early years of our national history followed a 
system of practical free trade. What is called the 
American System was not announced until 1816. The 
reason for our first tariff of 1790 was that we were 



254 THE TARIFF AND THE TRUSTS 

then a young country in a state of transition from an 
agricultural to a more diversified industrial condition. 
Nine-tenths of the people were engaged in agriculture. 
Hamilton realized the importance of bringing about 
more diversified industries. Few of our people resided 
in cities. Philadelphia, the largest city, had only 
42,000 inhabitants. New York, second in size, 32,000, 
and Boston, 18,000. Food products, tobacco, lumber, 
rice and indigo were the chief products of agriculture. 
The partial transition from an almost exclusively 
agricultural state to young manufactories involved 
capital, methods, plants and imported workmen, and 
it was hardly an indication of belief in high protect- 
ive tariffs that under such circumstances a tariff im- 
posing low duties should have been enacted. The 
wise Madison said : 'T wish we were under less neces- 
sity than I find we are to shackle our commerce with 
duties, restrictions, and preferences.'' Hamilton, in 
his report on manufactures, said that while the pay- 
ment of bounties for the encouragement of new in- 
dustrial undertakings was justifiable, their "contin- 
uance in manufactures long established was most 
questionable." The actual workings of the first tariff 
showed that the rates upon all importations were about 
yy2 per cent., and it was upon so few articles that the 
schedule was printed on a sheet about a foot square 
and hung up in each custom house. Slight increases 
were made from time to time, but so slight that in 1808 



OUR TARIFF HISTORY 255 

the duties upon dutiable imports did not exceed 13 
per cent. The volume of our total exports in each of 
the two years 1806 and 1807 exceeded $100,000,000, a 
sum not again surpassed until 1834. These were the 
days when industries were really in their infancy, and 
the great statesmen who met injustice with the im- 
mortal Declaration of Independence, brought an un- 
equal war against the mighty power of England to a 
successful end, and established our government under 
a Constitution which Gladstone declared to be the 
greatest ever struck off at one time by the wit of man ; 
these men, whom all time will recognize as statesmen, 
believed that duties from 8 to 13 per cent, were suffi- 
cient to protect our infant industries against the world. 
Washington, the leading spirit of those early years, in 
his farewell address, advised justice to all nations and 
entangling alliances with none; Jefferson cultivated 
friendship with all the peoples of the world, and under 
the guidance of these men our people grew in numbers, 
in strength and in wealth. Such men were too great 
and too wise to believe that the gain of one country in 
trading involved an equivalent loss to the other, that 
commerce was a species of warfare, or that an imported 
article was an injury to a country. This narrow and 
illiberal policy of government was born later when in- 
dustries had become established, and the only method 
of perpetuating injustice was to arouse prejudice and 
passion against the foreigner. 



256 THE TARIFF AND THE TRUSTS 

During the Embargo of 1808 and during the con- 
tinuance of the War of 1812 many establishments for 
the manufacture of cotton goods, woolen cloths, iron, 
glass, pottery, and other articles sprang up. When the 
war was over men urged that these industries were 
young and weak and required protection to become 
fully established. So in 1816 the first tariff which 
looked toward protection was enacted, imposing upon 
many articles of foreign commerce an average duty 
upon dutiable imports of 20 per cent. Upon cotton 
and woolen goods imported an average duty of about 
25 per cent, was imposed. The making of pig and bar 
iron had been regarded as established at the time of 
the passage of the Hamilton Tariff, and it was not un- 
til 1 8 16 that Congress was asked to extend protection 
to it. It is an interesting fact that Southern members 
of Congress favored the tariff of 1816 and that New 
England was opposed to it. Henry Clay in 1816 gave 
the reason for protecting home industries as follows: 
*'The object of protecting manufacturers is that we 
might eventually get articles of necessity made as cheap 
at home as they could be imported and thereby produce 
an independence of foreign countries." Since 1875 
we have been imposing duties of from 50 to 150 per 
cent, upon hundreds of imported commodities which 
we could manufacture as cheaply at home as they 
could be imported without duties, and our manufactur- 
ers have been selling their domestic products to the 



OUR TARIFF HISTORY 257 

people during all this time at the price of the foreign 
commodity increased by nearly the amount of the duty. 
Demosthenes said: 'The first of all things is to see 
events in their beginnings, to discern tendencies be- 
forehand and proclaim them beforehand to others." 
This is exactly what Daniel Webster did at Faneuil 
Hall, October 2, 1820, when, speaking of our protect- 
ive tariff system, he said that it was ''a poHcy which 
no nation had entered upon or pursued without having 
found it to be a policy that could not be followed with- 
out great national injury nor abandoned without ex- 
tensive individual ruin." Our protective tariff has con- 
tinued since 1883 because the business interests of the 
country were afraid of the financial depression which 
might come by any decided change. 

During the War of 181 2 there was a great expansion 
of banking, and wild speculation arose and continued 
until 1819, when a severe financial crisis occurred. A 
fictitious value was given to all kinds of property. 
Specie was driven from circulation as if by common 
consent, and all efforts to restore society to its natural 
condition were treated with undisguised contempt. 
Niles' Register, the leading paper of that day, speak- 
ing of the speculators, says : ''So it was in all the great 
cities — dash — dash — dash — vendors of tape and bob- 
bins transformed into persons of high blood, and the 
sons of respectable citizens converted into knaves of 
rank — through speculation and the facilities of the 
17 



258 THE TARIFF AND THE TRUSTS 

abominable paper-money system/' Such times are a 
fertile soil for the growth of protective tariffs, and 
members of Congress, turning their minds to this 
method of stimulating industry, introduced bills in 
1820 and 1822 in Congress for the increasing of duties, 
but they did not pass, and the next tariff act is that of 
1824. Party lines so far as they existed in 1824 were 
not regarded in the vote on the tariff. It was carried 
mainly by the votes of the Western and Middle states. 
The Southern members were opposed to the law. New 
England was divided, Rhode Island and Connecticut 
voting for the bill, Massachusetts and the other New 
England states against it. John Randolph said of this 
tariff: "The merchants and manufacturers of New 
Hampshire repel this bill, while men in hunting shirts, 
with deerskin leggings and mocassins on their feet, 
want protection for home manufacturers." The fac- 
tories in the East in those early days were of a higher 
grade in comparison to those of like kind in the Middle 
or Western states than were the English factories to 
those of the Eastern states. Notwithstanding this fact, 
the factories of the middle West have come up to as 
great if not a greater degree of perfection than those 
of the East. The competition between Eastern fac- 
tories and the factories of the middle West has been 
going on for fifty years and the infant industries of the 
West have never conceived for one moment that they 
needed protection against their more powerful neigh- 
bors in the East. 



OUR TARIFF HISTORY 259 

Under the Tariff of 1824 the duty on imports of cot- 
ton and woolen goods was raised from 25 to 33^^ per 
cent. The increase upon imports of woolen was off- 
set, however, by a duty of 30 per cent, upon wool, 
which before that time had been admitted at 15 per 
cent. In 1827 an attempt was made in Congress to 
pass a bill increasing the duties upon woolens. It was 
passed in the House, but lost in the Senate by the cast- 
ing vote of Vice-President Calhoun. Thereupon a 
convention of protectionist manufacturers and ambi- 
tious politicians gathered in the midsummer of 1827 at 
Harrisburg. It recommended higher duties for the aid 
of agriculture and also on the manufactures of wool, 
hemp, flax, iron, and glass. This convention, it was 
claimed, had been called to further the political ambi- 
tions of President John Quincy Adams. The tariff had 
not been a political issue up till this time. The Eastern 
states had been engaged largely in shipbuilding and 
the merchants of Boston and other large cities were 
importers, but during the War of 1812 and prior to 
1827 there had been a great increase in the number of 
cotton and woolen factories in the New England States. 
These interests had now become powerful and were 
contending for further protection. Jackson was a 
candidate for the Presidency, and behind him were the 
Southern men who were opposed to protection. He 
needed Pennsylvania and New York, which were the 
controlling factors in his contest against Adams. A 



26o THE TARIFF AND THE TRUSTS 

majority in the House of Representatives were favor- 
able to his election, and when Congress convened a 
committee in the House, consisting of five Jackson 
men and two Adams men, were appointed to consider 
the question of the tariff. Their action shows that 
the great men who had shaped the policy of this coun- 
try in the early days were passing away and that the 
politician was coming to the front. This committee 
deliberately framed a bill imposing such high duties 
on iron, hemp, flax, wool, molasses, and sail cloth that 
it was thought that the followers of Adams would vote 
against it. The Southern members openly said that 
they meant to make the tariff so bitter a pill that no 
New England member would be willing to swallow it, 
Calhoun years afterwards, in 1837, frankly disclosed 
the plot of the Southern members of that time and 
Martin Van Buren was said to have been the man who 
suggested this means of heading off the passage of a 
tariff. The Eastern Congress men were loyal to 
Adams and they were afraid to reject this tariff for 
fear of its effect upon his election. So it became a 
law, and was known as the Tariff of Abominations. 
It imposed an average ad valorem rate of duty of 
48.88 per cent., the highest known in this country be- 
fore the McKinley Act of 1890. For the first time 
compound duties, specific and ad valorem combined, 
were levied. Jackson was elected, and both the 
Adams and Jackson men united in condemning this 



OUR TARIFF HISTORY 261 

tariff. It was superseded by the tariff of 1832, which 
practically restored the tariff of 1824. Even this 
more moderate tariff could not stand the attacks of the 
Southern men, and in the following year the com- 
promise tariff was passed. By the compromise tariff 
of 1833 it ^^^s provided that all duties which in that 
tariff exceeded 20 per cent, were to have one-tenth of 
the excess over 20 per cent, taken off on January i, 
1834; one-tenth more on January i, 1836; one-tenth in 
1S38; and another in 1840. Having disposed of four- 
tenths of the duty over 20 per cent, by 1840, it was 
then provided that on January i, 1842, one-half of the 
remaining excess was to be removed, and on July i, 
1842, the other half was to go, leaving the tariff at 20 
per cent. The duties remained high during the whole 
period till 1842, thus the average ad valorem rate of 
duty on actual imports was in 

1834 32.67% 

1836 31.65% 

1838 37.84% 

1840 30.37% 

1842 24.00% 

Notwithstanding the duties were continued so high, 
protectionists twenty or thirty years later invented the 
theory that the tariff of 1833 was the cause of the ter- 
rible financial crisis which swept over the country in 
1837, Professor Taussig, in his excellent ^'History o£ 
the Tariff," says that this contention had its origin in 
the writings of Henry C. Carey "who has been guilty 



262 THE TARIFF AND THE TRUSTS 

of many curious versions of economic history, but of 
none more remarkable than this. It may be found in 
the various passages in his works; and from these it 
has been transferred to the writings of his disciples 
and to the arguments of protectionist authors and 
speakers in general. Yet no fair-minded person, hav- 
ing even a superficial knowledge of the economic his- 
tory of these years, can entertain such notions." You 
may look through all the speeches in Congress in 1837 
and following years, you may examine all the news- 
papers of that day, and you will fail to find anywhere 
by anyone at that time a claim of any relation between 
the tariff of 1833 and the financial crisis of 1837. The 
cause of the crisis of 1837 can be shown in a few 
facts. In 1833 President Jackson transferred from 
the United States Bank the surplus of $40,000,000 and 
distributed it among the state banks scattered through 
the different states in the Union. We had no national 
debt, the expenses of government were comparatively 
small, and the protective tariff as usual had resulted 
in a surplus. In our day the politicians know what to 
do with a surplus, and quickly dispose of it to remove 
any objections to protection. The state banks com- 
menced loaning their new deposits to land speculators. 
Boom towns like the malarial Eden described in 
''Martin Chuzzlewit" appeared all over the country. 
Lands far away from roads and rivers in the Maine 
forests sold for fabulous prices. The real estate of 



OUR TARIFF HISTORY 263 

New York was assessed for more in 1836 than it was 
in 1 85 1. In May, 1836, Mr. Webster introduced a bill 
in the Senate directing that $35,000,000 of the $40,000,- 
000 deposited by President Jackson should be appor- 
tioned among the states and paid over by the banks in 
quarterly installments beginning January i, 1837. This 
bill was passed and signed by President Jackson. 
Prior to 1834 the average annual sale of public lands 
for settlement had been $2,500,000, in 1836 it had risen 
to $26,000,000, and the public lands were being paid 
for by state bank notes. In July, 1836, President 
Jackson, alarmed at the terrible mania of speculation 
and paper money, issued a circular requiring the pay- 
ments for lands to be made in specie, hoping thus to 
check the wild land speculation of the time. On Janu- 
ary I, 1837, the first installment of the surplus was 
paid over by the banks, the packages of specie and bank 
notes of the installments being drawn in the coaches or 
mud wagons of the day over rough roads to the state 
capitals of the different states. The second installment 
in April was paid, but the banks could not get the 
specie for the third installment, and the financial crash 
came as a consequence. Mr. Webster, speaking in 
New York City in 1837, ascribed the panic to the above 
named causes and a committee sent from New York 
to Washington to ask President Van Buren to rescind 
the specie circular attributed it to the same causes. 
Henry Clay, the father of the American system of pro- 



264 THE TARIFF AND THE TRUSTS 

tection, speaking in the United States Senate in 1842 
on the panic of 1837 and its causes, said : ''It is a great 
mistake to say that any portion of the embarrassment 
of the country resulted from it (the tarift of 1833). 
Other causes have contributed to this result, and it 
is to be attributed to experiments made upon the cur- 
rency; also to the action of the states, which, by 
plunging into schemes of internal improvements have 
made debts abroad, and thereby given a false appear- 
ance to the prosperity of the country, and, when their 
bonds depreciated, the evils from which they now suf- 
fer as a consequence ensued." Hugh McCulloch, 
Secretary of the Treasury under three administrations, 
was in 1837 ^^e manager of a bank at Fort Wayne, 
Indiana, and a member of the Board of Control in the 
State Bank of Indiana. Writing to the New York 
Times on February 3, 1890, he describes most vividly 
the speculative mania of those days, and ascribes the 
panic of 1837 solely to the same causes as Mr. Clay. 
The protectionist manufacturer regards as prosperous 
only those times when the surplus money of the people 
congests in his hands. But a portion of the surplus 
apparently filters down through his hands to the hands 
of men who pervert history to sustain the cruel in- 
justice by which he profits. The treatment of the panic 
of 1837 by protectionists is a marked instance of such 
perversion. 

Before leaving the period prior to 1842, it is impor- 



OUR TARIFF HISTORY 265 

tant to observe that the industry of cotton and wool 
had arrived even in those days to a condition of such 
cheapness of manufacture as to be no longer in need of 
protection. In the first chapter of this volume I have 
mentioned the testimony of the wool manufacturers 
before the Committee on Ways and Means of the 
House of Representatives in 1828. As to the cotton 
Industry, Professor Taussig, in his "History of the 
Tariff,'' says: "Probably as early as 1824, and almost 
certainly by 1832, the industry had reached a firm po- 
sition in which it was able to meet foreign competition 
on equal terms. Mr. Nathan Appleton, who was a 
large owner of cotton factory stocks, and who was al- 
so, in his time, one of the ablest and most prominent 
advocates of protective duties, said in 1833 that at that 
date coarse cottons could not have been imported from 
England if there had been no duty at all, and that even 
on many grades of finer goods competition was little 
to be feared. This account of the stage reached by 
the industry finds confirmation in a careful volume on 
the cotton manufacture in the United States published 
in 1840 by Robert Montgomery. "This writer's gen- 
eral conclusions," says Professor Taussig, "are much 
the same as those which competent observers reach for 
our own time. Money wages were about twice as 
high in the United States, but the product per spindle 
and per loom was considerably greater." Sixty-five 
years after this date, with all the improvements which 



266 THE TARIFF AND THE TRUSTS 

we have made in machinery for the making of cotton 
cloth, the cotton manufacturers are actually enjoying 
an average ad valorem rate of duty on imports of cot- 
ton of 49.41 per cent., while the woolen manufactur- 
ers, including the duty on raw wool, are protected in 
the amount of about 94 per cent, upon the importations 
of woolen goods. 

In 1842 the Whigs passed a new tariff bill, imposing 
upon foreign imports an average ad valorem duty on 
actual imports of 32 per cent. During the four years 
that this tariff continued the iron industries of the 
country increased rapidly. In 1832 Congress had per- 
mitted the importation of iron rails for the new rail- 
ways being built at that time without duty, and under 
that act they continued to be imported until 1842. 
Protectionists have always claimed that the growth in 
the iron industry which followed the enactment of the 
tariff of 1842 resulted from the increase of duties upon 
iron and its manufactures ; but that growth is attributed 
by experts in the iron trade of those years to the com- 
mencement of the use of anthracite coal in the making 
of pig iron in 1840 and to the introduction of the 
process of making pig iron by puddling about the same 
time. 

This completes the history of the Whig party as the 
makers of tariffs, and it is to be observed that they at- 
tempted to protect American industries while the tariff 
makers of to-day are protecting gigantic monopolies. 



OUR TARIFF HISTORY 267 

The old Whigs, however mistaken, provided protection 
for the American people. The modern American 
protectionist advocates protection against the American 
consumer and in favor of the European consumer. In 
the days we have been describing the protective policy, 
although unwise, may have been honestly commenced 
and continued by Congress. To-day it is graft, simply 
an alliance between corrupt politicians and manufac- 
turers, who do not think it wrong directly or indirectly 
to buy such legislation. The mistake in our day has 
been in permitting a force outside of government to 
be created that is powerful enough to control govern- 
ment in spite of the people. This force is becoming 
so powerful and so corrupt that it seeks to control the 
editor in his sanctum and the professor in his lecture- 
room. Independence recoils from its power and free 
thought and free speech are absolutely endangered by 
its existence. 

The Walker Tariff, named for Robert J. Walker, the 
Secretary of the Treasury during the presidency of 
James K. Polk, was enacted in 1846. Mr. Walker laid 
down the following principles as those upon which this 
tariff was based: 

''i. That no more money should be collected than 
is necessary for the wants of government. 

''2. That no duty should be imposed upon any arti- 
cle above the lowest rate which will yield a just amount 
of revenue. 



268 THE TARIFF AND THE TRUSTS 

"3. That below such rate discrimination may be 
made, descending in the scale of duties, or for imper- 
ative reasons thp article may be placed upon the free 
list. 

"4. That the maximum revenue duty should be im- 
posed upon all luxuries. 

"5. That all minimum and specific duties should 
be abolished and ad valorem duties substituted in their 
place." 

The prevailing duties on dutiable imports under this 
tariff was 25 per cent. It remained in force until 1857, 
when a still further reduction of duties was made. The 
revenue from the tariff was such that a surplus had ac- 
crued in the Treasury. The Act of 1857 reduced the 
duties to about 18 per cent, and became a law on March 
3, 1857. The House of Representatives at that time 
was composed of 83 Democrats, 108 Republicans and 
43 other members known as "Know Nothings." The 
Senate was Democratic. The practical results of the 
Walker Tariff had been so favorable and the prosperity 
of the country during the eleven years of its existence 
had been so marked that a considerable proportion of 
the Republican party in that day voted for the reduc- 
tion. Mr. Morrill, of Vermont, a member of the Ways 
and Means Committee in 1857, argued for a reduction. 
Every Republican member from New England present 
at the time the vote was taken voted for the reduction 
and every member from New England, except Mr. 



OUR TARIFF HISTORY 269 

Collamer from Vermont, had voted against the Walker 
Tariff in 1846. Mr. Blaine, in his ''Twenty Years in 
Congress,'' says: "Moreover the tariff of 1846 was 
"yielding abundant revenue, and the business of the 
"country was in a flourishing condition at the time his 
"(Polk's) administration was organized. Money 
"became very abundant after the year 1849 i large en- 
"terprises were undertaken ; speculation was prevalent, 
"and for a considerable period the prosperity of the 
"country was general and apparently genuine. After 
"1852 the Democrats had almost undisputed control 
"of the government, and had gradually become a free- 
"trade party. The principles embodied in the tariff of 
"1846 seemed for the time to be so entirely vindicated 
"and approved that resistance to it ceased, not only 
"among the people but among protection economists, 
"and even among the manufacturers to a large extent. 
"So general was the acquiescence that in 1856 a pro- 
"tective tariff was not even suggested or even hinted by 
"any one of the three parties which presented presi- 
"dential candidates. ... By this law the duties were 
"placed lower than they had been at any time since the 
"War of 1812. The act was well received by the peo- 
"ple and was indeed concurred in by a considerable 
"proportion of the Republican party." When the 
proposed law had passed the House of Representatives 
and reached the Senate, it received the support of Mr. 
Hamilton Fish, one of the Republican Senators from 



270 THE TARIFF AND THE TRUSTS 

New York, and the vote of Senator Sumner, who was 
so anxious that the bill be passed that he left a bed of 
illness in Boston and went to Washington to vote for 
the bill. It received the support of Senator Wilson 
then Senator from Massachusetts, of Senator Bell of 
New Hampshire, of Senator Allen of Rhode Island, 
of Senators Collamer and Foote of Vermont, of Sena- 
tor Fessenden of Maine, and of Senators Foster and 
Toucy of Connecticut. Senator Wilson, of Massa- 
chusetts, speaking in the Senate in favor of this bill, 
said: ''We of New England beHeve that hemp, flax, 
silk, lead, tin, copper, hides, linseed, and other articles 
should be admitted duty free. We are for the reduc- 
tion of the revenue to the actual wants of an economical 
administration of the government, for the depletion of 
the treasury now full of hoarded gold." 

I hesitate about giving figures showing the great 
prosperity of agriculture and manufacturing during 
the period from 1846 to 1861 lest I may be regarded as 
adopting that method of proof of the good effects of a 
law upon the welfare of society. The American pro- 
tectionist has his statistical abstract in hand, and shows 
you the progress in the United States during the ex- 
istence of our outrageous tariff as proved by each year's 
return. Every step of advancement and development 
he modestly puts down to protection and gives no 
credit to our immense natural resources, inventive 
talent, individual energy, or freedom from traditional 



OUR TARIFF HISTORY 2^1 

restraints. Our prosperity at any given time may be 
attributed much more to natural causes than to the 
existence of the tariff. Without a comprehensive view 
of historic facts and of economic subjects no man can 
even give a good guess as to the benefits which have 
accrued to a country from the existence of low tariffs 
or high tariffs. Each four years we are entertained 
by speakers who with drum and trumpet declamation 
enlighten us with the statement that we owe all of our 
prosperity to the tariff. Twenty lines of customs 
houses divide the industrial people of Europe. Here 
the people scattered over three million and a half square 
miles of territory have absolute free trade between 
states. Our people are possessed of the most resistless 
energy which has ever appeared in all history among 
any people in the worM. Our population is replenished 
each year by about a million immigrants bringing not 
only millions of money, but, better still, fresh young 
life, energy and capacity to earn money and to create 
wealth. We use more labor-saving machinery than 
all the rest of the world combined. The St. Lawrence 
River and the Great Lakes extend more than a thou- 
sand miles inland and give us such a means of internal 
commerce as no other country in the world possesses. 
Our railways convey our products to the sea board at 
the lowest rates known in the world, and yet each four 
years the demagogue upon the stump entertains the 
American people with the same old story that we owe 



2^2 THE TARIFF AND THE TRUSTS 

all of our prosperity to protective tariffs. Without 
claiming the prosperity existing between 1846 and 
i860 as a sole result of protective tariffs, let me give 
you the statistics. The national wealth as shown by 
the census of 1850 was $7,136,000,000. After 10 years 
of the Walker Tariff, as reduced in 1857, the national 
wealth had increased, according to the census of i860, 
to $16,160,000,000, an increase of 126 per cent., the 
greatest percentage of increase that has ever occurred 
in the history of the country in any ten years' period. 
In 1850, according to Mr. Carroll D. Wright's work 
entitled "Industrial Evolution of the United States," 
the capital employed in manufacturing in the United 
States was $533,000,000 in round numbers. In i860 
it had gone up to $1,009,000,000 an increase of 89.4 
per cent. When we compare this growth in manu- 
facturing with the ten years between 1890 and 1900, 
we find that in 1890 the capital employed in manu- 
facturing was $6,500,000,000; in 1900 $9,800,000,000, 
or an increase of 50.7 per cent., as against 89.4 per cent, 
between 1850 and i860. The increase in the products 
of manufacture from 1850 to i860 was 85.1 per cent. 
The increase between 1890 and 1900 was 38.9 per cent, 
only, or less than half the amount. Between 1850 and 
i860 the railway mileage of the country increased from 
9,000 miles to 30,600 miles, an increase of over 300 per 
cent., while from 1890 to 1900 it increased 19 per cent. 
In Grosvenor's ''Does Protection Protect?" appears a 



OUR TARIFF HISTORY 273 

table showing the imports and exports per head of 
population between 1843 and i860 in which it is stated 
that the annual average per head of population was : 

Imports Exports 

In 1843-46 $ 4.66 $5.22 

In 1847-50 6.35 6.32 

In 1851-55 9.10 7.35 

In 1856-60 10.41 9.45 

The imports and exports in million dollars were : 

Imports Exports 

Annual average of the four years 1843-46 92.7 100 

" " " " 1847-50 138.3 136.8 

*• " " " five " 1851-55 231 186.2 

" 1856-60 305 278.2 



(( tt 



But the protectionists will tell you that in October 
of 1857, about seven months after the passage of the 
Act of 1857 reducing the duties, a great panic oc- 
curred, and that its cause was the reduction of the 
tariff. The crisis was anticipated at the time the tariff 
was passed. A surplus had accumulated in the United 
vStates Treasury, and the tariff was passed with the 
hope that it would serve to prevent the crisis, and that 
the money in the treasury would get out among the 
people in time to prevent the stringency which was al- 
ready threatening. In August the Ohio Life and Trust 
Company, a chartered banking institution with two 
millions of capital and the agency for a large section 
of the West, suddenly failed. Its capital had been 
practically embezzled. Banks had been multiplying 
throughout the country during the period from 1846 
with great rapidity. In 1851 a bank was started in the 
18 



274 THE TARIFF AND THE TRUSTS 

City of New York for every month in the year. New 
York had become the banking center of the country, 
and between July and October of 1857 they called in 
their loans to the amount of 30 per cent. Upon the 
failure of the Ohio Life and Trust Company, a panic 
seized the New York banks, and, instead of standing 
by each other, they attempted to look out each for it- 
self, and precipitated a crash throughout the country. 
The inflation caused by the Wild Cat State Bank bills, 
which were in circulation in those days, had led to so 
much speculation that a general panic over the coun- 
try followed, but it was of short duration. Professor 
Sumner, of Yale, in his "History of American Cur- 
rency,'' says of the panic of 1857 : "The state of the 
currency was generally recognized as the root of the 
trouble." When Republicans with Whig antecedents 
attempted to pass an act increasing the duties in 1859, 
they failed. Alexander H. Rice, of Massachusetts, a 
member of the House, and actively engaged in manu- 
facturing, said when the bill increasing the duties was 
under discussion: "The manufacturer asks no addition- 
al protection. He has learned that the greatest evil, 
next to a ruinous foreign competition, is excessive pro- 
tection, which stimulates a ruinous and irresponsible 
competition at home." They had not learned in those 
days, as have our trust magnates to-day, to form trust 
combinations and smash the competition by excessively 
low prices in each locality where it appears, and having 



OUR TARIFF HISTORY 275 

destroyed it then to charge excessive prices to all con- 
sumers. In the year i860 our country exhibited to 
the world the greatest prosperity it had ever known, 
and our exports in that year were considerably larger 
than in any prior year in the history of the country. 

The duty enacted in 1857 failed to supply sufficient 
revenue for the support of the government and the 
Republicans prepared a bill increasing the duties which 
became a law in April, 1861. Then followed a series 
of acts known as the war tariffs. Nearly every month 
of the war some change was made in the duties in 
order to increase the revenue. Manufacturers did not 
apply to Congress for an increase of duties as they do 
now, but the duties were imposed for the purpose of 
obtaining revenue to support the government and of 
making return to the manufacturers for the heavy in- 
ternal taxes imposed. On July 14, 1862, Mr. Morrill, 
of Vermont, then Chairman of the Ways and Means 
Committee, introduced a bill in the House of Repre- 
sentatives entitled "An Act increasing temporarily the 
duties on imports and for other purposes." Internal 
duties were again increased and to counterbalance 
these another increase of import duties was decreed by 
the Act of June 30, 1864. No statesman in those days 
attempted to justify these laws except upon the ground 
of the demands of war. For twenty years after the 
war these tariffs were known as the War Tariff. 
When introducing the Act of 1864, Mr. Morrill said : 



2y6 THE TARIFF AND THE TRUSTS 

''The present bill is not likely to suit everybody, and I 
regard it as only a temporary measure fit to be intro- 
duced because of the imperious necessities of our 
present condition." And again he says : ''Although our 
present tariff in ordinary times would be likely to be 
denounced as prohibitive, the present bill is indispen- 
sable to preserve the aggregate of our internal revenue. 
When we impose a tax of 5 per cent, on our manu- 
facturers and increase the tariff to the same extent upon 
foreign manufacturers, we leave them upon the same 
relative footing that they were at the start." Internal 
or excise duties were imposed in 1864 ^-^^d prior thereto 
of $2 a ton upon pig iron, $3 a ton upon railroad iron, 
2 cents a pound upon sugar, 6 cents a hundredweight 
upon salt, and 2 cents a pound on raw cotton. The 
amount of these internal taxes was estimated at 
about 15 per cent. In 1864 was passed the highest 
duty of the war, increasing the average duty upon im- 
ports under the Act of 1862 of 37.2 per cent, to 47.6 
per cent. It was expressly understood that its pas- 
sage was not only for the purpose of raising revenue 
for the support of government, but for the purpose of 
making a return to the manufacturers for the internal 
revenue duties upon their products. This is shown 
not only by the quotation from Mr. Morrill's statement 
to the House above, but by the fact that the bill was 
introduced on the 2nd day of June, 1864, and debated 
only for a day before its passage, that it went to the 



OUR TARIFF HISTORY 277 

Senate, and was there passed in a very short tfme, and 
that no special consideration was given to it, the whole 
debate in both houses being to the effect that it was 
simply a temporary act for revenue and for the pur- 
pose of making return to the manufacturers for the 
internal taxes. The Act of 1864, however, is the basis 
of our present tariff, and instead of being reduced the 
protective duties imposed by it have been greatly in- 
creased from time to time. For nearly forty years 
Congress has been steadily selecting from the Act of 
1864 every product w^hich did not compete with a home 
product and repealing the duty thereon, while it has 
been steadily increasing duties on the importation of all 
products which came into competition with home prod- 
ucts. To-day duties are imposed simply to create 
monopoly. The internal revenue taxes of the war 
were repealed because the citizen knew he was paying 
them, while the tariff, which takes his property so 
deftly that he does not appreciate it, has not only been 
continued but increased. 

In 1867 Mr. David A. Wells, then Special Commis- 
sioner of the Revenue and at that time a protectionist, 
although afterw^ards one of the most able and earnest 
of free traders, prepared a bill proposing reductions in 
the duties on raw materials such as scrap iron, coal, 
lumber, hemp, and flax. This bill passed the Senate, 
but failed to pass the House. 

During the war there was a stoppage of the supply 



278 THE TARIFF AND THE TRUSTS 

of raw cotton and the production of wool and woolens 
increased. After the war the government no longer 
needed its woolens and they were thrown upon the 
market, the result being a depression in the woolen 
trade. As a consequence, in December, 1865, a few 
manufacturers of carpets, worsted goods and blankets 
called a convention at Syracuse, New York, of wool 
growers and manufacturers for the purpose of pro- 
curing from Congress a law increasing the duties up- 
on wool. These duties were already very high, but the 
manufacturers agreed with the wool producers to give 
them any duties they wished upon the raw material if 
the wool growers would aid them in procuring an in- 
creased duty upon the manufactured cloth, and the re- 
sult was the Act of 1867, whose main provisions are 
retained in the Dingley Tariff of 1897. By the terms 
of this act wool was divided into three classes, carpet, 
clothing, and combing wool. The first class included 
a grade of wool not produced in this country, but the 
other two classes of clothing and combing wools were 
made to pay duties as follows : 

Value 32 cents or less, duty of 10 cents per pound 
and 1 1 per cent, ad valorem. 

Value more than ;^2 cents, a duty of 12 cents per 
pound and 10 per cent, ad valorem. 

This duty of 1867 was about double the duty of 1864, 
and the result was that the grade of wool chiefly used 
in the making of clothing was doubled in price. To 



I 



OUR TARIFF HISTORY 279 

arrive at the compensatory duties of the manufacturer 
upon imported woolen cloth, it was calculated that 
four pounds of wool was used in making a pound of 
cloth, and if imported a duty of four times iij^ cents, 
or 46 cents, should be the compensating duty. Then, 
to include dyes and other expenses, it was fixed at 50 
cents per pound and 35 per cent, ad valorem on im- 
ported woolen goods. The 35 per cent, ad valorem al- 
lowed the manufacturer over and above the compensa- 
tory duty was intended to cover internal taxes in an 
amount of 10 per cent, upon his manufactured product 
which had not been removed, so that he received pro- 
tection to the amount of 25 per cent. As a matter of 
fact, however, the compensating duty was much too 
high and concealed a considerable amount of protection 
to the manufacturer, and the same has been true of the 
tariffs on wool ever since. By one method and another 
in the successive tariffs of 1883, 1890, and 1897, this 
ad valorem duty has been increased, until finally it has 
reached the amount of 55 per cent. The compensatory 
duty in the tariff of 1867 has been decreased, but it 
still contains a large amount of protection for the 
manufacturer. 

A little before 1869 the Calumet and Hecla Mining 
Company was established. It owned the great copper 
mines near Marquette in Michigan. So rich were these 
copper deposits that the price of copper had fallen con- 
siderably between 1867 and 1869 and, although the 



28o THE TARIFF AND THE TRUSTS 

production was such that the mining company was ex- 
porting copper and selling it in foreign countries, in 
1869 it asked Congress for an increase of duties. The 
duty before that time had been 2j/^ cents a pound on 
imported copper ingots, it was increased by the Act of 
1869 to 5 cents per pound. President Johnson vetoed 
the bill and both houses by the necessary two-thirds 
vote passed it over his veto. In 1872 imported copper, 
after paying a duty of 5 cents a pound, could be sold in 
New York for 24 cents a pound. The owners of this 
copper mine sold their copper at about 23^^ cents, just 
low enough to keep out the foreign product. The 
duty on copper proved so nearly prohibitive that in the 
year 1878, according to David A. Wells, the revenue 
received by the government from the importation of 
copper was only 5 cents, the duty on one pound. Un- 
til 1883 when the duty was decreased to 4 cents a pound 
the owners of this copper mine exported their copper 
and sold it in London on an average of about 15 cents 
a pound, while selling the same copper in New York 
at about 20 cents a pound. The English and Con- 
tinental manufacturers of brass materials, being able 
to buy their copper from our countrymen for about 
5 cents a pound less than it was sold in our own 
markets, used the American copper in the manufacture 
of brass and exported it to our country nearly ruining 
our manufacturers of brass. Finally, American manu- 
facturers who wished to purchase copper cheap enough 



i 



OUR TARIFF HISTORY 28l 

to compete with the foreigner conceived the idea of 
buying it of the Enghsh purchasers of American cop- 
per. The copper was shipped to a purchaser in Eng- 
land, purchased from him by Americans, and returned 
at once in the original packages to the United States, 
thus avoiding paying a duty under the law. Then the 
mining company required every Englishman purchasing 
their copper to give a bond that he would not resell 
the copper purchased by him to an American. The 
eighty thousand watered shares of the Calumet and 
Hecla Mine, costing about $15 a share, sold as high in 
those years as $175 a share and produced quarterly 
dividends of $5 a share, or 133 1-3 per cent. This 
mining company recently has been paying dividends 
upon its $2,500,000 capital as follows : 1895, 60 per 
cent; 1896, 100 per cent.; 1897, 120 per cent.; 1898, 
160 per cent. ; 1899, 280 per cent. ; 1900, 320 per cent. ; 
1901, 260 per cent.; 1902, 100 per cent.; 1903, 140 per 
cent. 

Since the days when the Calumet and Hecla Mining 
Company were selling their copper abroad at about 5 
cents a pound less than they were selling it at home, 
hundreds of American manufacturers have imitated 
their example; and while these patriotic Americans 
have been selling their highly protected products to 
Europeans for less than they would sell them to our 
own people, they have been saying of those who op- 
posed our outrageous tarifif : ''These people who would 



282 THE TARIFF AND THE TRUSTS 

reform the tariff serve the interests of Europe. We 
support the interests of America. Look at the people 
over there and think how much better off you are than 
they are. Your prosperity is the object of their envy. 
Your institutions the models of their imitation. Do 
you desire to compete with the pauper labor of Europe? 
Do you wish to let England manufacture for us ?" And 
the modest uninformed American citizen votes for the 
protective tariff because it is the ''American System." 
What irony to call such a system the ''American Sys- 
tem'M 

In 1870 Congress imposed a duty oi 1% cents a 
pound, or $28 per gross ton upon the importation of 
steel rails. The duty continued at this amount until 
1883. By 1877 ^he average price of steel rails in Eng- 
land was only a little over $31 per ton. After 1877 
for a while the English price did not average so high 
as $28 per ton. The duty of $28, therefore, became 
equivalent to more than 100 per cent, on the foreign 
price. After 1879 for some years our manufacturers 
sold their steel rails at $61 to $67 per ton, while the 
same rails could have been purchased in England at 
$31 to $36 per ton. Congress, knowing the facts, 
nevertheless continued a duty of $17 a ton on steel rails 
by the Act of 1883, of $13.44 per ton under the Mc- 
Kinley Tariff, and to-day of $7.84 under the Dingley 
Bill, although there has not been a year since 1880 
when steel rails could not be manufactured in this 
country as cheaply as in England. 



OUR TARIFF HISTORY 283 

In 1870 the only supply of marble in the country was 
in a single district in Vermont. Competing marble 
came from Italy. The duty on marble in 1861 was 
30 per cent., in 1862 it was raised to 40 per cent., in 
1864 to 80 per cent. The internal revenue taxes on 
the manufactures of marble were removed in 1870. 
Notwithstanding this fact, the owners of the marble 
quarries in Vermont applied to Congress in that year 
for an increase of duty, and specific duties were im- 
posed which were equivalent to from 100 to 150 per 
cent. 

Nickel, like marble, was produced in one locaHty in 
the country. Mr. Joseph Wharton, of Philadelphia, 
was the owner of the nickel mine. He had been very 
industrious in persuading Congress during the war 
to impose duties upon the foreign product which com- 
peted with his nickel and had secured a duty of 15 
cents by the Act of 1864. By 1870 he had induced 
Congress to increase the duty to 30 cents per pound, 
or about 40 per cent, on the value of the nickel, and by 
the aid of this tariff built up a great fortune. 

By 1872 all the internal duties which had any connec- 
tion with protective duties had disappeared. There 
was at this time in the United States Treasury a sur- 
plus revenue of $100,000,000 which had accrued from 
the tariff after paying all appropriations and all interest 
on the public debt. The Congressmen of those days 
had not learned so well as in our day how to reduce a 



284 THE TARIFF AND THE TRUSTS 

surplus. The people of the West complained bitterly 
of the burdens of the tariff, and in that year the Ways 
and Means Committee reported a bill providing for a 
reduction of the duties upon a large number of im- 
ports. Mr. Dawes, the chairman of the Committee, 
was opposed to the bill and so another member of the 
Committee, Mr. Finklenberg, of Missouri, introduced 
the measure, saying that it was intended merely to 
"divest some industries of the superabundant protec- 
tion which smells of monopoly and which it was never 
intended they should enjoy after the war." The Con- 
stitution of the United States provides that bills for 
the raising of revenue shall originate in the House of 
Representatives. But of what matter is the Constitu- 
tion when Senators desire to aid their friends, the manu- 
facturers? The Senate, notwithstanding this provi- 
sion in the Constitution, seeing that the popular feeling 
would result in the passage of the bill in the House of 
Representatives, themselves, in conjunction with the 
manufacturers, prepared a bill providing for a hori- 
zontal reduction of 10 per cent, of all protective duties. 
The result was that the bill originating in the House 
of Representatives was side-tracked and the Senate 
bill passed. Mr. John L. Hayes, the Secretary of the 
Wool Manufacturers' Association, and who later be- 
came President of the Tariff Commission of 1882, took 
charge of this bill at Washington for the Wool Manu- 
facturers' Association, and after the desired result was 



k 



OUR TARIFF HISTORY 285 

accomplished, in a speech which he made, spoke of 
"the grand result of a tariff bill reducing duties fifty- 
three millions of dollars and yet leaving the great in- 
dustries almost intact. The present tariff [of 1872] 
was made by our friends in the interest of protection. 
. . . A reduction of over fifty million of dollars, and 
yet taking only a shaving off from the protection 
duties." Mr. Dawes, of Massachusetts, the Chairman 
of the Committee on Ways and Means, was most active 
in the House of Representatives in bringing about this 
act of 1872, and in 1875 he drafted a bill to restore the 
ten per cent. With little public attention his bill was 
passed by both Houses of Congress and the country 
was back to the duty before 1872. The Act of 1872, 
how^ever, had removed the duties on tea, coffee, wines, 
sugar, molasses, and spices and had gotten rid of 
about every duty upon imports which did not compete 
with our own products. These were not restored. 
This method of legislating to get rid of duties upon 
imports which did not come into competition with any 
home product, and which produced revenue only to the 
government and could not be used for the purpose of 
plundermg the people was steadily pursued in all the 
tariffs between the end of the war and the Dingley Bill. 
In 1882 there being a large surplus in the Treasury 
occasioned by the collection of excessive duties, Con- 
gress passed an Act for the appointment of a tariff 
commission which was to report at the next session of 



286 THE TARIFF AND THE TRUSTS 

Congress any changes in the tariff which it thought 
desirable. The President of the Commission was Mr. 
John L. Hayes, mentioned above, the Secretary of the 
Wool Manufacturers' Association. The majority of 
this committee were protectionists, and yet so out- 
rageously high were the duties that they unanimously 
reported in favor of a reduction of 20 per cent, or more. 
The House, having passed a bill for the reduction of 
certain internal taxes, the Senate tacked to this bill 
an amendment reducing the duties, pursuant to the ad- 
vice of the Tariff Commission. But when the bill 
reached the House, a curious transaction occurred. A 
two-thirds vote under the then existing rules was re- 
quired to bring the Senate bill before the House, but 
such majority could not be obtained, although a ma- 
jority of the members of the House were in favor of 
concurring with the Senate. The protectionists wished 
to have the bill referred to a conference committee 
where it could be amended in the interests of their 
clients, the manufacturers, and Mr. Reed, of Maine, 
was equal to the occasion. He moved the adoption by 
the House of a new rule by which a bare majority of 
the House could take up a bill amended by the Senate 
for the purpose of non-concurrence in the Senate's 
amendments, but not for the purpose of concurrence. 
This resulted in the appointment of a conference com- 
mittee to settle the details of the bill and the tariff act 
of 1883, the only revision up till that time of the tariff 



OUR TARIFF HISTORY 287 

act of 1864, was settled by a conference committee, as 
desired by the protectionists in the House. Nearly 
twenty years had passed since the war ended. All of 
the internal taxation affecting protective duties had 
been repealed as early as 1872. The people of the 
country wished the tariff duties reduced, the tariff 
commission composed of protectionists had reported 
in favor of a reduction of at least 20 per cent., the ex- 
isting duty had brought a surplus revenue into the 
treasury of over $100,000,000 annually since 1879, and, 
notwithstanding all these facts. Congress passed the 
tariff' act of 1883, again increasing the duties on dress 
goods made wholly of wool and on the finer grades of 
cloths and cassimeres. A duty of 35 per cent, had 
been imposed in 1864 on cotton hosiery, embroideries, 
trimmings, and laces at a time when raw cotton was 
taxed heavily. Notwithstanding that the internal taxes 
had been removed, this rate remained unchanged from 
1864 to 1883, ^^d Congress in 1883 increased that 
duty to 40 per cent. It imposed a duty of 75 cents per 
ton on iron ore, and increased the duties on cogged 
ingots, rods, piston rods, and steamer shafts. It in- 
creased the ad valorem duties on the finer classes of 
imported woolens from 35 per cent, to 40 per cent. It 
changed the duty from $7 a ton on pig iron to $6.72, 
and changed the duty upon copper from 5 cents a 
pound to 4 cents. Mr. John L. Hayes, the President 
of the Tariff Commission and Secretary of the Wool 



288 THE TARIFF AND THE TRUSTS 

Manufacturers' Association, expressed his approval of 
the duties on wool and woolens in the new tariff say- 
ing : ''Reduction in itself was by no means desirable to 
us ; it was a concession to public sentiment, a bending 
of the top and branches to the wind of public opinion 
to save the trunk of the protective system. In a word, 
the object was protection through reduction; we were 
willing to concede only to save the essentials both of 
the wool and woolens tariff. . . . We wanted the 
tariff to be made by our friends." How long will the 
American people continue to allow the tariffs to be 
made by men in Congress who are actually manufac- 
turers or interested in corporations which are receiv- 
ing great benefits from the tariff ? How much longer 
will the American people continue to allow tariffs to 
be made by the friends of the manufacturers? Is it 
not about time that the consumers through their repre- 
sentatives have something to do with the making of 
tariffs? In 1884 Mr. Morrison, of Illinois, introduced 
in the House of Representatives a bill providing for a 
general reduction of tariff duties of 20 per cent, and 
the entire remission of duties on iron ore, coal, lumber, 
and other articles. The measure met with vehement 
opposition on the ground that it provided for a hori- 
zontal reduction, although Congress in 1872 had by 
the act of that year provided for just such a reduction, 
and the enacting clause was stricken out by a vote of 
156 to 151. Again in 1886 he introduced a new meas- 



OUR TARIFF HISTORY 289 

ure providing for detailed changes and reductions of 
duties and this was defeated by a vote of 157 to 140. 
In 1886 Mr. Mills introduced a bill for the reduction 
of duties and it also was defeated, while in the same 
year in the Senate a bill was prepared but not passed 
increasing the duties. 

The issue in the campaign of 1888 was the tariff, a 
large surplus having accumulated again, and Mr. Har- 
rison was elected president, the vote of New York being 
decisive of the issue. Then came the McKinley Tariff 
of 1890 establishing the highest duties which the coun- 
try had known up till that time. By that act the aver- 
age ad valorem duty on dutiable imports was made 
upwards of 50 per cent. The duties were largely what 
are known as compound duties consisting of both 
specific and ad valorem duties, duties which necessa- 
rily and invariably tax the purchaser of the cheaper 
grade of goods much higher than the purchaser of the 
more costly grades. Upon hundreds of articles under 
the McKinley Bill specific duties only by the pound, 
yard, and gallon were imposed. The duty upon pearl 
buttons under that bill affords a good illustration of 
the effect of such duties. The specific duty imposed 
was 2j/^ cents per fine, and the ad valorem duty 25 per 
cent. Certain grades of buttons were of low value and 
other grades were very costly. The result was that 
upon the cheapest grades it was necessary to pay a 
duty of 280 per cent., while upon the costlier grades 
19 



290 THE TARIFF AND THE TRUSTS 

the duty was only 60 per cent. I quote from the re- 
port of the minority of the committee on Ways and 
Means of 1890 as to the effect of such duties in the 
McKinley Bill: ''The lowest grades of woolen yarn, 
worth not over thirty cents per pound, are to be sub- 
jected to a duty of 112 per cent., while the most costly 
yarn will pay ^2. per cent. One grade of coarse, 
cheap blankets will be required to pay 106 per cent., 
but the finest blanket will pay "j^ per cent. The coars- 
est and cheapest woolen hats will be subject to a duty 
of III per cent., and the finest to 66 per cent. Women's 
and children's cheapest dress goods with cotton warp 
are to be taxed 106 per cent., and the finest J'^ per 
cent. The lowest grade of woolen cloth will pay 125 
per cent., and the highest grade 86 per cent. The 
cheapest qualities of knit goods for underwear range 
from 112 to 138 per cent., but the finest and most ex- 
pensive will pay 78 per cent. Woolen shawls of the 
coarsest grade used by the poorest people will pay 135 
per cent, duty, and worsted goods of the lowest grade 
will pay 130 per cent., while the highest grade will pay 
90 per cent.'' Specific duties are continued in the 
Dingley Tariff. As further illustrating the nature of 
this tariff, attention should be called to the woolen 
schedule, which provides that if woolen cloth worth 
between 30 and 40 cents per pound is imported, the 
duty should be 38^ cents per pound, plus 40 per cent. 
Thus on goods valued at between 30 and 40 cents a 



OUR TARIFF HISTORY SQI 

pound the compensating duty was fixed at 38V2 cents, 
a sum larger than the whole cost of the foreign article, 
without considering the 40 per cent, in addition there- 
to. Will the American people ever see the outrageous 
nature of such tarififs? The duty on women's and 
children's dress goods had been raised in 1883 above 
the rates of 1867, and in the McKinley Tariff they were 
raised still further to a duty equivalent to over 100 per 
cent, on their foreign value. 

Protectionists have steadily misrepresented the na- 
ture of the Wilson Tariff passed in August, 1894. 
They invariably describe it as a free-trade measure 
and as the cause of the panic which occurred more than 
a year before its passage. Instead of its being a free- 
trade measure it was highly protective in every fea- 
ture. The average ad valorem rate of duty on dutiable 
imports actually imported under the Wilson Bill for 
the year ending July i, 1897, was 42.17 per cent.; the 
average duty upon dutiable imports under the tariff of 
1883 for the year ending July i, 1884, was 41.60 per 
cent. ; while the average ad valorem rate of duty for 
the year ending July i, 1864, toward the end of the 
Civil War, was 36.69 per cent. Yet protectionists de- 
clare that the Wilson Bill, a clearly protectionist meas- 
ure, instituted a period of free trade. The Wilson 
Bill removed the duty on wool, thus making a compen- 
sating duty to the manufacturer unnecessary, but it left 
the ad valorem duty of 50 per cent. The manufactur- 



292 THE TARIFF AND THE TRUSTS 

ers complained of this, and their complaint is very 
good evidence that the compensating duty in the prior 
tariffs had been higher than was necessary to off-set 
the duty upon wool. It changed the specific duty on 
raw sugar to an ad valorem duty of 40 per cent., and 
left the duty of one-eighth of one per cent, on refined 
sugar imposed by the McKinley Bill, adding thereto 
a duty of one-tenth of a cent per pound on refined 
sugar coming from countries that gave an export 
bounty. In the discussion which . occurred over the 
sugar duty Senator Aldrich, Republican Senator from 
Rhode Island, said : ''Certain persons not known to the 
Constitution, or the laws, not recognized as any part 
of the national government, have demanded that cer- 
tain provisions [referring to the sugar schedule] shall 
be written in the statutes of the United States and the 
members of a great party cravenly submit to these de- 
mands.'' At the time of the passage of the bill sugar 
stock rose in a day or two from 95 J^ to 106^. Three 
years pass, and Senator Aldrich, no longer indignant 
at dictation from the sugar trust, with his associates 
^'cravenly" enacts a new sugar tariff dictated by the 
same trust and sugar stock goes up with a bound from 
no to 146, putting $13,000,000 into the pockets of the 
stockholder. An investigation was instituted to ex- 
amine the charges that improper means had been used 
by the American Sugar Company to bring about the 
passage of the provision as to the duty upon refined 



OUR TARIFF HISTORY 293 

sugar in the Wilson Bill, and upon that investigation 
Mr. Havemeyer testified as follows : ''The sugar trust 
makes it a rule to make political contributions to the 
Republican party in Republican states and to the 
Democratic party in Democratic states. . . . We get 
a good deal of protection from our contributions. . . . 
Our company has made considerable money out of the 
McKinley Bill.'' Can the consumer be secured justice 
when the trust controls a considerable number of 
Senators in both parties? There is no reasonable 
doubt that the provisions of the Wilson Bill as to the 
duties on sugar, and of the Dingley Bill as well, were 
the result to some extent of improper influences. The 
duties on wire nails in the Wilson Bill were high 
enough, so that the makers of wire nails could frame 
a pool on May i, 1895, ^^^ raise the base price of wire 
nails from $.85 on that day to $3.05 a little over a year 
later. The duties in the Wilson Bill were high enough 
on steel ingots and steel rods, so that between April 
and September, 1895, steel billets rose 60 per cent. 
Surely the men representing the Democratic party in 
the United States Senate in 1894 sorely abused the 
confidence which voters had placed in that party, and 
the Wilson Bill which they passed, instead of being a 
free trade measure, was but little better than the Mc- 
Kinley Bill which it superseded. It was repealed 
within a period of about two and a half years, and 
surely a sufficient time had not passed to determine 



294 THE TARIFF AND THE TRUSTS 

whether or no it was an improvement over the Mc- 
Kinley Bill. 

The panic of 1893 and the subsequent depression 
clearly came from causes existing at the time Mr. 
Cleveland became president. At the end of his first 
administration the National Treasury was overflowing 
with money, but the first Congress of Mr. Harrison's 
administration cut off $50,000,000 of the public in- 
come by the passage of the McKinley Bill, imposing 
duties so high as to keep foreign imports out of the 
country. The same Congress added $50,000,000 to 
the ordinary expenditures of government. It borrowed 
$50,000,000 of the national banks by turning the re- 
demption fund into the treasury, and it added over 
$150,000,000 to the legal-tender currency of the country 
redeemable in gold, while it diverted an equal amount 
of the public revenue to the purchase of pig silver at 
much more than its real value, to be stacked in the 
treasury vaults. For several months before the 4th 
day of March, 1893, Mr. Foster, Secretary of the 
Treasury, was represented in the public newspapers as 
contemplating the immediate issue of bonds to be sold 
to raise funds to supply the deficiency, but by hook or 
crook this was tided over until the 4th day of March, 
1893, when he turned over the Treasury, practically 
bankrupt, to the new administration, and the financial 
crisis was already at hand. A shortage of crops in our 
own country, the low price of wheat prevailing here, 



OUR TARIFF HISTORY 295 

together with large crops in the countries of our com- 
petitors and the general depression then prevailing 
throughout European countries, together with the 
other above stated causes, easily accounts for the finan- 
cial depression of 1893 and 1894. 

If the history given here does not show that the ex- 
isting tariff is protection gone mad, then I know not 
the inferences to be drawn from facts. The War 
Tariff was imposed with a distinct understanding that 
it was to be removed when the internal duties upon 
manufactured products and manufacturers were re- 
pealed. All the statements made by Congressmen at 
that time tend to show this. When the war was over 
and the internal duties had been removed, the people 
had the right to have the burdens of protection also 
taken off, but scattered over our entire territory they 
were weak compared with the few hundreds or thou- 
sands of manufacturers who had access to Congress- 
men. The people, absorbed in their daily tasks, are 
unable to follow the details of so complicated a ques- 
tion as the tariff, and they relied, and had a right to 
rely, upon their Representatives in Congress to care 
for their interests. Members of the House and of the 
Senate have been recreant to their duty to the people 
in allowing the Tariff of 1864 not only to continue, 
but to have its duties in many cases almost doubled. 
There is no justification of our existing tariff. Every 
intelligent man knows this, and yet so weak is the 



296 THE TARIFF AND THE TRUSTS 

public Spirit of this country, and so strong are special 
interests that this terrible injustice continues. The 
average ad valorem duties upon dutiable imports, to 
which I have referred so frequently in this chapter, do 
not correctly describe the real condition of the tariff. 
The specific duties found in the Dingley Bill hide from 
public view the real power of prohibiting the importa- 
tion of foreign imports. The importation of the lower 
grades and values of hundreds of commodities is actu- 
ally prohibited by these specific duties. The result is 
that upon the coarser and cheaper grades of its manu- 
factured articles the trust can increase the price ex- 
torted from the poor in many cases a hundred per 
cent. Since the Tariff of 1864 the average of the com- 
bined ad valorem and specific duties upon dutiable im- 
ports has been higher under the various acts passed 
by Congress than those imposed during the same period 
by any other country in the world. The existing 
Russian duty apparently is higher than ours, but we 
are actually collecting, and have been collecting for 
nearly forty years, the highest duties on dutiable im- 
ports of any country in the world. 



CHAPTER IX 

HOW ENGLAND GOT FREE TRADE 

There is no history in the world more interesting 
than the struggle of Englishmen for industrial free- 
dom. The conditions existing for centuries before the 
agitation for the repeal of the Corn Laws bore with 
great severity upon the people. From the twelfth to 
the fifteenth century the local trade of towns was regu- 
lated by the merchant and craft guilds, the manufacture 
of cloth being restricted to certain towns and a monop- 
oly given to their guilds. A statute of Edward III 
enumerates ten staple towns in England that paid for 
the monopoly they enjoyed and gives the customs 
duties payable on the goods sold there. During the 
reign of the same monarch a statute was passed regu- 
lating the clothing of the people and describing what 
apparel might or might not be worn by the different 
classes. In the reign of Edward VI certain saddlers 
of England were given a monopoly of trade in leather, 
which continued until the cobblers petitioned Parlia- 
ment against it. Parliament then abolished the 
monopoly, saying, ''Since the making of the statute 
all kinds of leather are more slenderly and deceitfully 

297 



298 THE TARIFF AND THE TRUSTS 

wrought and made than ever before, but nevertheless 
dear or dearer/' In the reign of EHzabeth it was a 
capital offence for a man a second time to export wool 
or English rams. In the reign of Charles II, for the 
protection of the makers of woolen cloth, an act was 
passed requiring that every dead body should be buried 
in a woolen shroud. The people, however, did not die 
fast enough to suit the weavers, and so in the reign of 
George I Parliament enacted, for the encouragement 
of the woolen and silk trades, that a person wearing a 
garment of calico should be subjected to a fine of £5, 
and any person selling it should be liable to a fine of 
i20. Under Elizabeth not only were monopolies 
granted to her courtiers to sell the necessaries of life, 
but the exclusive rights of trading in different parts of 
the world were granted. The Russia Company formed 
in 1553, the Baltic Company in 1579, the Levant Com- 
pany in 1 58 1, the Guinea Company in 1588, and the 
East India Company in 1600, were some of these com- 
panies. In a pamphlet published in 1664 by Thomas 
Mun, called ''England's Treasure by Foreign Trade," 
the mercantilist theory of trading which prevailed in 
that day is explained ''to consist in keeping imports less 
than exports, thus to secure a favorable balance, and 
provide an abundance of money which could be drawn 
upon in time of need." This is the theory of our en- 
lightened protectionists to-day. Not only were there 
duties upon imports, but also upon exports of many 



HOW ENGLAND GOT FREE TRADE 299 

commodities like coal, timber, wool and others. Sir 
Robert Walpole, as Prime Minister in the reign of 
George I, advised the removal of export duties, and 
pursuant to his advice they were taken off of more 
than a hundred articles of British manufacture, while 
forty articles of raw material were allowed to be im- 
ported without duty. William Pitt, the great Prime 
Minister, had a strong leaning toward free trade. He 
entered upon a course of economic reforms by a com- 
mercial treaty with France in 1786, but the war of 1793 
with France brought not only his reforms to an end, 
but produced conditions which renewed and intensified 
the protective policy. At the end of the eighteenth 
century there were 1550 articles on the English customs 
tariff and 2,090 on the Irish. The customs laws of 
England made six heavy folio volumes. All duties 
were heavy and many were prohibitory. Between 
1797 and 181 5 six hundred separate acts affecting 
duties were passed. In the early part of the nineteenth 
century a series of conspiracy acts were passed pro- 
hibiting combinations and preventing workmen from 
selling their labor by collective bargaining. It was a 
crime at that time in England for a laboring man to 
belong to a labor union. What was known as the Act 
of Settlement interfered with the free movement of 
labor in search of employment and kept the laboring 
man in the parish where he was born. 

During the Napoleonic Wars Great Britain sought 



300 THE TARIFF AND THE TRUSTS 

to cut off the trade between France and her colonies, 
and France endeavored to exclude from the Continent 
the importation of British goods. The decrees of 
Napoleon and the British Orders in Council destroyed 
trade between the countries, except such as was car- 
ried on by smuggling. At the close of the Napoleonic 
War in 1815 Great Britain found herself with a debt 
of £860,000,000 and taxation (which was £17,000,000 
annually before the war) amounting to £72,000,000 
annually for a population numbering less than twenty 
million people. Notwithstanding the great necessities 
for revenue, the income tax prevailing during the war 
and at the time of its close was repealed, and the coun- 
try commenced imposing duties upon all imports and 
especially upon corn. Half the foreign goods brought 
into England from France were smuggled. In 1842 
Sir Robert Peel, in the discussion over his bill to re- 
duce duties, read a circular in the House of Commons 
in which lace, gloves, and other French goods were 
offered to a London firm at rates ''considerably below 
your custom house duties." By 1820 the burdens of 
the protective tariff had become so grievous that peti- 
tion after petition came from different parts of Great 
Britain to the House of Commons complaining of the 
injustice of the restrictive system and asking for free- 
dom of trade except so far as duties a /ere necessary for 
revenue. The answer of government was, ''The diffi- 
culty of the reform of taxation is the vested interests 



HOW ENGLAND GOT FREE TRADE 30I 

which have grown up and which would be imperiled 
if any attempt were made at such a design/' About 
1824 or 1825 Mr. Huskinson, President of the Board 
of Trade, carried on a series of financial reforms for 
about four years reducing the tariff restrictions upon 
many imports. He endeavored especially to reduce the 
duties on raw materials and succeeded in lowering 
many. Mr. Huskinson's opinion of the protective sys- 
tem is found in these words : ''We are far behind other 
nations in this industry [manufacturing of silk] ; 
it [protection] has a chilling and benumbing effect 
and men are rendered indifferent to exertion by the se- 
curity of a prohibitory system.'' The most oppressive 
of all the protective duties were the Corn Laws, a gen- 
eral description for duties upon the importation of 
grain. In 1824 foreign wheat was prohibited from 
entering the Kingdom until the current price was equal 
to 70s. a quarter of a ton's weight, or 8 bushels. When 
the price reached 85s. a quarter, the duty was reduced 
to its lowest, which was 5s. 2d. per quarter. Under 
such protection wheat rose at times as high as 112s. 
per quarter. Terrible distress prevailed between 1820 
and 1832, but there was no relief for the people in Par- 
liament. The members of the House of Lords were 
the great landowners of England, and they regarded 
high prices as beneficial to their interests. A consid- 
erable proportion of the members of the House of Com- 
mons represented what were known as rotten boroughs, 



302 THE TARIFF AND THE TRUSTS 

owned by members of the House of Lords. The Duke 
of Norfolk owned or controlled eleven members in 
the House of Commons, men representing boroughs 
in his domain. Lord Lonsdale controlled nine, Lord 
Darlington seven, the Duke of Rutland, the Marquis 
of Buckingham and Lord Carrington six each. In 
this way the House of Lords was all-powerful in con- 
trol of the Commons. While many of these boroughs 
had only a few voters, and one of them but a single 
elector, the great cities of Birmingham, Manchester, 
Glasgow, and Bath were inadequately represented. 
The Reform Bill in 1832 swept away this abuse, ex- 
tended the franchise very widely and gave the great 
cities representation in the House of Commons. It 
was the Reform x\ct of 1832 that rendered the repeal 
of the Corn Laws possible. Although duties were im- 
posed upon thousands of imported commodities, the 
most were so high as to be prohibitive, and the revenue 
received from the customs amounting to £23,000,000 
was nearly all collected on about twenty commodities. 
Such was the condition of England when the move- 
ment which we are now to describe commenced. 

In 1837 King William IV died, and Victoria became 
Queen of England. The conditions of the laboring 
people both in the manufacturing and agricultural in- 
dustries in England at that time were so terrible that 
the truth would seem an exaggeration. In a land pos- 
sessing the greatest wealth existing at that time and 



HOW ENGLAND GOT FREE TRADE 3O3 

loaning money in industrial undertakings all over the 
world, the laboring men in manufacturing and agricul- 
ture were actually starving, and they were starving be- 
cause the law practically prohibited the importation of 
food and the home supply was insufficient. Early in 
1837 an Anti-Corn Law Association was started in Lon- 
don, consisting of seventy-four members, but it seems 
to have taken no further action. In February of that 
year Mr. Richard Cobden attempted to induce the 
Manchester Chamber of Com^merce to take up the sub- 
ject of the repeal of the Corn Laws, but without suc- 
cess. In March, 1838, Mr. Charles P. Villiers, a 
brother of the Earl of Clarendon and Member from 
Wolverhampton, then a young man, brought forward 
in the House of Commons a motion to inquire into the 
operation of the Corn Laws, and repeated it each year 
thereafter until their repeal. In answer to a petition 
in that year for a repeal of the Corn Laws, Lord Mel- 
bourne, the Whig Prime Minister, replied, ''that the 
government would not move until they were assured a 
majority of the people were in favor of a change/' 
That is the reply of the protectionists in our Congress 
to-day — ''We will stand pat until the people direct us 
to act." And that will always be the attitude of Con- 
gress until the people throw up party allegiance and 
carry on the battle outside of party lines. The strug- 
gle in England, however, had been commenced by men 
who knew how to deal blows effectively and to gather 



304 THE TARIFF AND THE TRUSTS 

millions of voters behind them in spite of party lines. 
In September, 1838, Doctor Bowring, an enthusiastic 
advocate of free trade, lectured in Manchester to about 
sixty people who were opposed to the Corn Law. He 
advanced with great force the argument that the de- 
pression in manufacturing in England resulted from 
shutting out the imports of corn and so shutting in 
their cotton, woolens, silk and other manufactured 
goods. ''In France," he said ''there are millions wil- 
ling to clothe themselves in English garments and 
you have millions of hungry mouths to take their corn. 
In Hungary, not being able to sell their corn, the peo- 
ple are turning their capital to manufacturing their 
own cloth. Universal trade is the means of prevent- 
ing war, for who quarrels with his benefactors, with 
those who confer benefits and blessings?" To this 
meeting the Anti-Corn Law League owes its origin. 
Seven enthusiastic men met on the 24th of the samiC 
month and decided to form the association. On the 
13th of October a committee of thirty-eight members 
was advertised, including the names of many who were 
afterwards prominent speakers in the agitation, among 
them being the names of Richard Cobden and John 
Bright. At the request of this Anti-Corn Law Associa- 
tion the Manchester Chamber of Commerce called a 
mxceting and adopted a resolution drafted by Mr. 
Cobden demanding "the repeal of all laws relating to 
the importation of foreign corn and other foreign arti- 



HOW ENGLAND GOT FREE TRADE 30S 

cles of subsistence and the removal of all obstacles to 
the unrestricted employment of industry and capital/' 
Richard Cobden, the leader of the contest from now 
on, was one of eleven children, the son of a small 
struggling farmer in Sussex. At the expense of a 
relative he attended a small Yorkshire school for five 
years and then entered the office of his uncle, a cotton 
merchant in London. At twenty-one he was a com- 
mercial traveler selling cotton goods. All the spare 
hours in his work for his uncle and upon the road were 
given to the study of the French language, of English 
history, literature and political economy. After a few 
years' experience as a commercial traveler, he, with two 
other young men, started business as commission 
agents in cotton goods. They afterwards became cot- 
ton printers, and Mr. Cobden accui^iulated some money 
in this business. Then his thirst for knowledge caused 
him to travel widely through France, Switzerland, the 
United States, Eastern Europe, and Asia Minor. He 
closely observed and studied the institutions of all the 
countries he visited. When in the United States lie 
made some small investments in the industries of that 
day, especially becoming interested in the Illinois 
Central Railway. He was a great admirer of our in- 
stitutions, and Richard Cobden and John Bright were 
the firm friends and advocates of the Northern cause 
during the Civil War. One would hardly expect from 
such a training exact and critical knowledge of history 
20 



306 THE TARIFF AND THE TRUSTS 

and political economy, yet it is the testimony of about 
all the great men with whom he came in contact that 
Mr. Cobden was equipped with the most exact and 
thorough knowledge in economic subjects and practical 
affairs of any man of his time. In addition to his 
mastery of facts, he had the rare gift of clear, terse, 
straightforward statement. 

A considerable proportion of the members of the 
Anti-Corn Law Association were manufacturers. 
England had availed herself from the middle of the 
eighteenth century of the inventions in spinning and 
weaving of Wyatt, Hargreaves, Arkwright, Crompton, 
and Cartwright, and these industries, together with 
others, had reached a point where England depended 
upon foreign markets for the sale of a large surplus of 
her manufactures. The Corn Laws and the other 
duties shut out imports, and the manufacturers came 
to see that whatever shut out imports shut in their 
product. Moreover, the Corn Laws had made food 
so scarce and so high that the laboring men could not 
live upon their daily wages, and the result was that a 
large proportion of the manufacturers in England were 
opposed to the Corn Laws. Their position was that 
the tax on imports had practically closed the foreign 
markets to their commodities which the foreigners were 
willing to take in exchange for corn and wheat. They 
maintained that the government by its system of pro- 
tection had brought about a like system on the part of 



HOW ENGLAND GOT FREE TRADE 3O7 

the United States and Prussia and Russia, and as a re- 
sult they had to pay duties to get their exports into 
these countries, then exchange them for the foreign 
export, and finally lose any profit by paying an import 
duty on the exchange product into England. Undoubt- 
edly considerations of this kind were powerful in bring- 
ing about the organization of the Anti-Corn Law Asso- 
ciation, but this class interest of the manufacturers as 
the battle went on broadened out into patriotism. 

In February, 1839, deputies of the Anti-Corn Law 
Association appeared in the House of Commons and 
asked through Mr. Villiers that they be allowed to offer 
evidence and present a petition at the bar of the House 
of Commons. This was about the time when John 
Quincy Adams in our own country was attempting 
to present petitions against slavery, and Aidams and 
the Anti-Corn Law Association both found that their 
petitions were presented to those who were pecuniarily 
interested in maintaining the institution which they as- 
sailed. The answer of Lord Melbourne, the Prime 
Minister of the Whig Party, to the petition was that 
to abolish protection of agriculture "was the wildest 
and maddest scheme ever entered into the imagination 
of man to conceive." In March of the same year the 
voluntary association called the Anti-Corn Law As- 
sociation was superseded by an incorporated body 
known as the Anti-Corn Law League, its object being 
to continue the agitation against the Corn Laws until 



J 



08 THE TARIFF AND THE TRUSTS 



they were repealed. The new League commenced 
raising money, employing lecturers, printing and cir- 
culating pamphlets, and instructing and organizing 
the country against the Corn Laws. They continued 
this for seven years until they had convinced the peo- 
ple, the leaders of both the Whig and the Conservative 
party, the Queen, and a large majority of the members 
of the House of Commons and of the Lords that the 
Corn Laws and the whole protective system ought to 
be repealed. The discussion of the Reform Bill and 
the enfranchisement of the large body of voters had 
stimulated the mental faculties of men and aroused in 
them a craving thirst for knowledge, and to these men 
newly franchised the speakers of the League went out. 
They battled side by side with another body of men 
known as the Chartists. The Chartists were a demo- 
cratic and to some extent a revolutionary body seeking 
a radical change in the political constitution of Eng- 
land and their demands were: 

First. Universal suffrage. 

Second. Vote by ballot. 

Third. Annual Parliaments. 

Fourth. Equal electoral districts. 

Fifth. No property qualification for members of 
Parliament. 

Sixth. Payment of members. 
The Chartists, numbering hundreds of thousands of 
laboring men, steadily battled against the Anti-Corn 



HOW ENGLAND GOT FREE TRADE 3O9 

Law League and frequently broke up its meetings. 
The leaders of the Chartist movement instructed their 
audiences that high prices of food insured high wages, 
just as the protectionist in our day argues to the labor- 
ing men that high prices of the necessaries of life in- 
sure high wages. 

A paper called the Anti-Corn Law Circular was 
started to spread the teachings of the League and at- 
tained a wide circulation. The largest number of 
members of the League came from Manchester, and 
there, in the early stages of the movement, the greatest 
interest appeared. Mr. Cobden was the owner of the 
spot where the great mass meeting was held in 1819 
and where the Peterloo massacre occurred, and he 
gave it to the League as a site for a building, and there, 
in 1843, arose the famous Free Trade Hall. 

In May, 1840, Mr. Joseph Hume, in the House of 
Commons succeeded in obtaining the appointment of 
a committee to inquire '^into the several duties levied 
upon imports and how far those duties were for 
revenue only or for protection." The examination of 
this committee brought to public attention the dif- 
ference between taxation for revenue and taxation 
for protection, and it appeared that the greater part 
of the duties were either prohibitive in their nature 
or restricted importations to such an extent as to 
afford little or no revenue. In 1841 the League com- 
menced sending out lecturers. Party politics were 



310 THE TARIFF AND THE TRUSTS 

entirely discarded, and the members of the League 
devoted themselves exclusively to the question of 
the removal of the tax on bread. Neither political 
party gave them any countenance. The Tories were 
firm in their support of protection and the sliding 
scale of duty on corn, and the Whigs who were in 
office at the time professed to advocate a moderate 
fixed duty upon corn. Upon the report of the Import 
Duties Committee referred to above Lord John Russell, 
the leader of the Whig party, seeing the popularity of 
the agitation of the Anti-Corn Law League, proposed 
in his budget for 184 1 to replace the sliding scale by 
a fixed duty of 8s. per quarter on wheat, 4s. 6d. per 
quarter on barley, and 3s. 6d. on oats, and to modify 
the duties upon sugar and timber. The issue with the 
Tory party having been joined over this proposal, the 
Whigs were defeated, and Sir Robert Peel, the leader 
of the Tory party, proposed a vote of want of confi- 
dence which was carried in the House of Commons by 
a majority of only one, and the government appealed 
to the country. In that election the Anti-Corn Law 
League in some districts nominated candidates who 
were free traders; in other districts where they had 
followers they supported the Whig candidates. Sev- 
eral members in favor of the repeal of the Corn Laws, 
among them Mr. Cobden, were elected, but the Tories 
succeeded in carrying the country, and came into office 
with a majority of nearly a hundred votes. 



HOW ENGLAND GOT FREE TRADE 3II 

From the commencement of the administration of 
Sir Robert Peel in September, 1841, the struggle which 
resulted in bringing free trade to England becomes 
intense, and it is of great importance that the reader 
shall see clearly the parties in that struggle and their 
attitude toward each other. Sir Robert Peel was him- 
self a man of aristocratic tendencies and of great 
wealth, but possessed a clear and logical mind and gen- 
erous feelings. He was the leader of the Conservative 
Party the members of which were personally interested 
as landowners in the continuance of the Corn Laws. 
The Whig party was also a protectionist party, led by 
Sir John Russell ; but at the commencement of the ad- 
ministration of Sir Robert Peel they attempted to unite 
with the free traders to embarrass his administration. 
Mr. Cobden and his followers refused to make any al- 
liance with either party, and in his first speech he de- 
clared : 'T call myself neither Whig nor Tory, I am a 
free trader," and under this banner, and pursuing this 
policy, he fought until the battle was won. So the 
reader will see that both parties were hostile to the re- 
peal of the Corn Laws and that the battle could be won 
only by convincing the people that the Corn Laws were 
a cruel injustice and ought to be repealed. It was 
different, however, with the duties on manufactured 
products. The large body of the manufacturers had 
come to believe that these duties were a hindrance rath- 
er than an aid to them, although there were many who 



312 THE TARIFF AND THE TRUSTS 

desired protection for their particular branch of manu- 
facture; and while a large majority of members of the 
House of Commons from both parties and the almost 
united interest of the Lords were supporting the Corn 
Laws, there was no organized opposition to the repeal 
of duties upon manufactured products. Sir Robert 
Peel, in the fall of 1841, as his action afterwards tended 
to show, probably had come to believe that the whole 
protective system was wrong. But practically all of 
the members of the Conservative party in the House 
of Commons of which he was leader were opposed to 
the repeal of the Corn Laws, and so he proceeded 
cautiously and wisely to relieve England of the curse 
of protection. Cobden many years afterwards said of 
Sir Robert Peel : ''My own conviction is that Peel was 
always a free trader in theory ; in fact, on all political 
economical questions he was always as sound in the 
abstract as Adam Smith or Bentham. ... It was a 
question of numbers with him; and as he was yoked 
with a majority opposed, he was obliged to go their 
pace and not his own/' Sir Robert Peel excited great 
astonishment in his first budget. Its cardinal point 
was the imposition of a revenue tax of yd, per pound 
on income, amounting to £1,200,000 a year. In con- 
nection with this direct tax he proposed to abolish and 
reduce the duties on 750 articles on which high duties 
had been imposed. His object as he set forth was to 
reduce the duties on the raw materials which constituted 



HOW ENGLAND GOT FREE TRADE 3I3 

the elements of manufacture to an almost nominal 
amount, on half manufactured articles which entered 
almost as much as raw material into domestic manu- 
factures to a small amount, and on articles completely 
manufactured sufficiently to enable the home producer 
to compete fairly with the foreign manufacturer, and 
also to reduce to a considerable extent the cost of liv- 
ing. ''If," said Cobden and his followers in their 
discussions before the people, ''it was the object of Sir 
Robert Peel to reduce the cost of living, and he wished 
to do this effectually, why did he not reduce the duties 
upon the agricultural products which were the people's 
food ?" Sir Robert Peel, however, knew that he could 
not carry his party at that time for such a measure, so 
he sought to remove the duties upon raw materials and 
to reduce largely the duties upon many other imports 
in order to procure a sufficient income for government 
while his authority was still paramount with his party. 
Then if the experiment proved successful, to take an- 
other step. It did prove successful beyond his highest 
hopes. The revenue of government was greatly in- 
creased while the manufacturers were relieved from 
serious burdens and their exporting enlarged by reason 
of the cheaper production through decreased cost of 
raw material. While Mr. Cobden and his followers in 
the House of Commons did not oppose the reforms of 
Sir Robert Peel, they introduced yearly a motion call- 
ing for the repeal of the Corn Laws and Mr. Cobden 



314 THE TARIFF AND THE TRUSTS 

spoke with great force and ability upon this motion 
depicting with pathos the terrible condition of the poor 
of England. In Manchester alone 116 mills had 
stopped work, two thousand families were reduced to 
such want as to have pawned even their beds, twelve 
thousand families were receiving poor relief and thou- 
sands subsisted on charity. Out of 50 mills in Bolton 
30 were idle and 6,995 persons, whose average earnings 
were only 13d. a week, were aided in one month by the 
Poor Protection Society. Similar conditions prevailed 
throughout all the cities in England, and while the 
working classes were on the verge of starvation, Brit- 
ish corn was 65s. a quarter and the duty on foreign 
wheat was 24s. 8d. per quarter. After describing the 
great supplies of corn in America Mr. Cobden said: 
^'Suppose now that it were but the Thames instead of 
"the Atlantic which divided the two countries — sup- 
'^pose the people on the one side were mechanics and 
"artisans, capable by their industry of producing a vast 
"supply of manufactures; and that the people on the 
"other side were agriculturalists, producing infinitely 
"more than they could themselves consume of corn, 
"pork, or beef — fancy these two separate peoples anx- 
"ious and willing to exchange with each other the prod- 
"uce of their common industry, and fancy a demon ris- 
"ing from the middle of the river — for I cannot imagine 
"anything human in such a position and performing 
"such an office — fancy a demon rising from the river, 



HOW ENGLAND GOT FREE TRADE 315 

''and holding in his hand an Act of Parliament, and 
"saying, 'you shall not supply each other's wants ;' and 
''then, in addition to that, let it be supposed that this 
"demon said to his victim with an affected smile, 'This 
"is for your benefit; I do it entirely for your protec- 
"tion !' Where is the difference between the Thames 
"and the Atlantic?'' 

It was about the time of Mr. Cobden's election to the 
House of Commons that he enlisted John Bright in the 
free trade campaign. Years afterwards Mr. Bright 
told the story of how it occurred. Only thirty-eight 
years old he had just suffered a deep affliction in the 
loss of his young wife and was overwhelmed with grief 
when Cobden called to condole with him. Before 
leaving, Cobden said : "There are thousands of houses 
in England at this moment where wives, mothers, and 
children are dying of hunger. Now, when the first 
paroxysm of your grief is past, I would advise you to 
come with me, and we will never rest till the Corn Law 
is repealed." 

During the Session of the House of Commons in 
1842, 2,881 separate petitions, signed by 1,540,755 per- 
sons, were presented in support of the total repeal of 
the Corn Laws. Sir Robert Peel, however, replied to 
these petitions that special burdens were imposed upon 
the agriculturalists in the nature of taxes, that he was 
also impressed with a fear of dependence upon other 
countries for the food of the people of England, and 



3l6 THE TARIFF AND THE TRUSTS 

that he desired to keep the price of wheat between 54s. 
and 58s. a quarter as a remunerative price for agri- 
culture. To accomplish this, he proposed a law com- 
mencing with a duty of 20s. when w^ieat was as low 
as 51s. and falling to is. when it reached 73s. Upon 
this proposition Mr. Cobden spoke with great force, 
urging that it was a fallacy that high prices made high 
wages, and showing that the wages of agricultural 
laborers had been higher when the prices of agricultural 
products continued for long periods lower than at that 
time. He said to the Commons that it was a well-fed 
people alone that could either defend the country or 
produce wealth, and charged them with bringing about 
a deterioration of the population and *'thus spoiling both 
the animal and intellectual creature.'' *Tt is not,'' said 
he, ''a potato-fed race that will ever lead the way in 
arts, arms or commerce. . . ." Then turning to Mr. 
Peel he said : ''You have reduced the tariff on 700 arti- 
cles, but you have omitted the two that can give ma- 
terial relief to the people, corn and sugar." But the 
sliding scale of duties became the law and the corn from 
the United States, Russia and Prussia was kept out of 
Great Britain. In a recent volume entitled *'The 
Hungry Forties" are gathered by Mrs. Cobden Unwin, 
a daughter of Richard Cobden, the testimony of men 
still living as to the condition of the laboring people 
in the early forties. I quote from this book the words 
of a Sussex laborer, David Miles: "Ay, I reklects the 



HOW ENGLAND GOT FREE TRADE 317 

''early forties afore the Corn Laws wor repealed. 
''Taters was what folks lived on then, an' the Tories 
'"ud 'ave it that a red 'errin' and a 'tater wor good 
''enuff for any workin'man. When I wor just on 
''twelve the 'taters failed, an' never shall I forgit 'ow 
"the folks went a-wanderin' about, peerin' at the 
'"taters, and try in' to find out what wor wrong wi' 'em. 
"It wor awful bad for the low class; many on 'em 
"were nigh starvin'. If 'ee complained to the masters, 
"they on'y said, quite indiff 'rent, ' 'Ee can go ; we don't 
"want 'ee.' An' if 'ee went to the vestry, which they 
"wor every blessed one on 'em farmers, and said 'ow 
"'ee wanted work, they'd ask, 'Who've 'ee bin a-workin' 
"for?' an' when 'ee answered, 'Mr, So-an'so,' up the 
"farmer 'd get and declare 'ee was dissatisfied, and then 
"ne'er a one 'ud have anythin' more to do with 'ee. 
'"Twas ne'er a bit o' good leavin' the parish; they'd 
"ask 'ee where did 'ee come from, and when 'ee said, 
" 'Heyshott,' they'd say as 'ow they didn't want no 
"furriners, and that there 'ud be the end o't." 

So terrible was the condition of the people that tens 
of thousands of half-starved mill hands in Lancashire 
and Manchester and in other parts of England were 
incited by the Chartists to cease working and to make 
demonstrations through the country which threatened 
the disturbance of the peace. Crowds of factory hands 
went about compelling mill hands in other villages to 
cease work and declaring their intention not to return 



3l8 THE TARIFF AND THE TRUSTS 

to work until they had obtained the charter. These 
poor deluded workmen, beheving in the statements 
of Chartist speakers that high prices made high wages, 
in many cases burned stacks of wheat, so that the price 
of their labor would be increased. Mr. Cobden and 
his followers did all they could to quiet these disorders. 
At Rochdale Mr. Bright helped to restore order and 
quiet by an address to the workingmen in which he 
discussed their condition, explained the causes of their 
misery and showed them that the charter was no 
remedy for their condition and that still less would 
public disturbance relieve them. 

In February, 1843, ^ painful incident occurred in 
the Parliamentary life of Mr. Cobden which threatened 
for a moment the success of the Anti-Corn Law 
League. The Queen's speech at the opening of the 
session contained these words: ''Her Majesty regrets 
the diminished receipts from some of the ordinary 
sources of revenue. Her Majesty fears that it must 
be in part attributed to the reduced consumption of 
articles caused by that depression of the manufactur- 
ing industry of the country which has so long pre- 
vailed and which her Majesty has so deeply lamented." 
Lord Howick, at an early night in the session, moved 
that the House should resolve itself into a committee 
to consider the passage in the Queen's speech in which 
reference had been made to the prevailing distress. 
The debate on this question extended over five nights. 



HOW ENGLAND GOT FREE TRADE 3I9 

Mr. Morley, in his ''Life of Cobden/' describes the 
words of Mr. Cobden and the scene which followed 
on the last night of the debate as follows : ''If you 
[Sir Robert Peel] try any other remedy than ours, 
what chance have you for mitigating the condition 
of the country? You took the Corn Laws into your 
own hands after a fashion of your own, and amended 
them according to your own views .... You passed 
the law, you refused to listen to the manufacturers, 
and / throw on you all the responsibility of your own 
measure .... It was folly or ignorance'' (Oh! 
Oh!). "Yes, it was folly or ignorance to amend our 
system of duties, and leave out of consideration sugar 
and corn . . . and I must tell the right Hon. Baronet 
that it is the duty of every honest and independent 
member to hold him individually responsible for the 
present position of the country:' When Cobden sat 
down, the Prime Minister rose to his feet, with signs 
of strong agitation in his usually impassive bearing. 
"Sir," he said, "the honorable gentleman has stated 
here very emphatically, what he has more than once 
stated at the conferences of the Anti-Corn Law League, 
that he holds me individually" — here the speaker was 
interrupted by the intense excitement which his em- 
phasis on the word, and the growing passion of his 
manner, had rapidly produced among his audience. 
"Individually responsible," he resumed, "for the dis- 
tress and suffering of the country ; that he holds me 



320 THE TARIFF AND THE TRUSTS 

personally responsible. But be the consequences of 
these insinuations what they may, never will I be in- 
fluenced by menaces, either in this House or out of 
this House, to adopt a course which I consider — " The 
rest of the sentence was lost in the shouts which now 
rose from all parts of the House. Cobden at once got 
up, but to litde purpose. "I did not say,^' he began, 
"that I hold the right Hon. gentleman personally re- 
sponsible/' Vehement cries arose on every side; 
''Yes, yes"— "You did, you did"— "Order"— "Chair." 
"You did," called out Sir Robert Peel. Cobden went 
on, "I said that I held the right Hon. gentleman re- 
sponsible by virtue of his office, as the whole context 
of what I said was sufficient to explain." This affair 
was the talk of all the newspapers of England, and 
was read by all the people with great excitement. Sir 
Robert Peel's friends claimed that it was a personal 
threat against the Prime Minister while the members 
of the Anti-Corn Law League and their adherents 
claimed that it was simply addressed to Sir Robert 
Peel as the representative of the Tory party with no 
thought of threatening him with violence. 

In July, 1843, M^- Bright was returned as member 
for Durham, and thereafter he and Mr. Cobden stood 
shoulder to shoulder in the Commons for the repeal 
of the Corn Laws. Nor did the words so unfortu- 
nately addressed to Sir Robert Peel stay the work of 
the League. During the year 1843 tnore than 9,000,000 



HOW ENGLAND GOT FREE TRADE 32 1 

tracts or stamped publications were distributed by the 
Anti-Corn Law League, hundreds of thousands of 
pounds were contributed for the campaign, and six 
hundred and fifty lectures were delivered throughout 
England and Scotland. The League now determined 
to carry the crusade into the agricultural counties, 
and to teach the farmers and rural laborers that they 
also were interested in the success of manufacturers 
and had a common cause with the workers in those 
industries in their need for cheap food and enlarged 
foreign markets. Mr. Bright and Mr. Cobden spoke 
together through the great agricultural centers of 
England and in many of the English cities. Attempts 
were made to storm the hustings, and threats of vio- 
lence were heard at many meetings. Farmers were 
afraid to attend the meetings in their immediate neigh- 
borhood, and sometimes would travel forty miles 
from home where they could listen to the speakers 
without being known. Men were sent to the meetings 
to put questions to the speakers. Cobden and Bright 
challenged the members of the Commons representing 
the districts in which they spoke to meet them in de- 
bate, and on several occasions succeeded so fully in 
convincing the farmers and the laborers that the Corn 
Laws were injurious to their interests that by a vote 
at the end of the meeting resolutions in favor of free 
corn were carried. Open-air meetings, with thousands 
of hearers, took place all over England. At these 
21 



322 THE TARIFF AND THE TRUSTS 

meetings free-trade processions carried big loaves of 
bread called free-trade loaves and small ones called 
protection loaves on poles and exhibited them to the 
people. But the lecturers in the smaller places did not 
fare so well. In many of these they were denied the 
use of the streets or the town hall or entertainment 
at the hotels and farmers would ofifer a bushel of wheat 
or more to any one who would throw the speaker 
into the river. When they talked in the street they 
were frequently arrested and fined for creating a dis- 
turbance, and at every point the great landlords 
harassed the speakers and made their life as unhappy 
as possible. 

Nor was the campaign confined to the country dis- 
tricts. In March, 1843, Drury Lane Theatre in Lon- 
don was engaged for a week, and vast assemblies 
crowded to hear the addresses. Later a fund of 
£100,000 was raised to engage Co vent Garden for 
fifty nights for a bazaar and demonstration, and to 
publish a weekly paper ''The League." During this 
year several famous lords and great landowners de- 
clared themselves converts to the League and con- 
tributed considerable sums of money for its support. 
In November, 1843, the London Times, speaking of 
the great subscriptions which were being raised for 
the continuance of the work of the League and of the. 
persistence of its agitators, said : "These are facts im- 
portant and worthy of consideration. No moralist 



HOW ENGLAND GOT FREE TRADE 323 

can disregard them, no politician can sneer at them, 
no statesman can undervalue them. He who collects 
opinions must chronicle them. He who frames the 
laws must to some extent consult them. The League 
may be a hypocrite, a huge Trojan horse of sedition 
but the League exists ... A new power has arisen 
in the state, and maids and matrons flock to theatres 
as though it were but a new translation from the 
French." In the year 1844 Mr. Bright and Mr. 
Cobden set out together for Edinborough to speak at 
all the principal places upon the way. In Glasgow at 
a single meeting £3,000 was raised for the League. 
The demand for speakers at meetings in Scotland 
became so great that Cobden and Bright separated 
each with a group of friends, Cobden going to the 
east of Scotland and Bright to the west. Every city 
they visited presented them with the freedom of their 
burghs. Tens of thousands of people listened to them 
and the great majority of the people of Scotland es- 
poused the principles of the Anti-Corn Law League. 
During the month of February, 1844, the League con- 
ducted a special agitation in London, and large public 
meetings were held in Covent Garden Theatre. 

In Parliament that year Mr. Cobden introduced a 
motion for the appointment of a committee ''to inquire 
into the eflfects of the protective duties on the interests 
of the tenant farmers and laborers of this country." 
He concluded his address by moving for a select com- 



324 THE TARIFF AND THE TRUSTS 

mittee of inquiry because ''the present system robs the 
earth of its fertiHty and the laborer of his hire, deprives 
the people of subsistence and the farmer of feeHngs of 
honest independence." Mr. Bright followed him and 
urged that *'if the majority thought that the justice of 
the Corn Laws could be proved they would grant the 
committee at once." But they did not grant the com- 
mittee. The depression among the farmers and the 
agricultural laborers grew during the year 1844. 
Wages fell to 7s. and 5s. a week, with wheat at 5is.3d. 
a quarter. Laborers living upon potatoes and meal 
were at starvation level. In Suffolk and Essex the 
wretched peasantry set fire to the ricks of corn, believ- 
ing that thereby they would raise the price of wheat, 
and consequently their wages, just as our Southern 
planters a few years ago burned some of their cotton 
to increase the price. Men destroyed machinery be- 
cause the Chartist leaders taught that the depression 
was the result of improved machinery. We wonder 
at such ignorance, but it is simply in accord with the 
teaching of Mr. Horace Greeley, Mr. Henry C. Carey, 
and Mr. Gaylord Wilshire. Mr. Greeley could see 
great benefits to labor from the burning of Chicago. 
Mr. Carey declared again and again that one of the 
greatest human calamities, a prolonged war between 
Great Britain and the United States, would be the 
very best possible thing for the United States, and Mr. 
Gaylord Wilshire has recently maintained that the San 



HOW ENGLAND GOT FREE TRADE 325 

Francisco earthquake will aid in continuing the pros- 
perity of the country. 

The income tax of 1842 was to continue only for a 
period of three years, and in 1845 Sir Robert Peel 
reported that the duties from a few articles like tea, cof- 
fee, sugar, and other commodities had produced a 
large amount of revenue, and, with the income tax, 
had more than supplied the needs of government. 
He proposed to continue the income tax for three years 
and to strike the protective duties from 430 articles 
then on the tariff list, saying to his followers that this 
would be a great advantage to commerce. Among 
the raw materials made free were silk, hemp, flax, 
yarns (except woolen), furniture, goods, manures, 
oils, minerals (except copper ores), dye stuffs, and 
drugs. In addition the remaining export duties were 
discarded, including the export duty on coal which had 
remained upon the statute-book for centuries. Al- 
though this change made a considerable reduction on 
sugar, it still preserved full duties in favor of the 
British West Indies, as against Cuba and Brazil, 
where sugar was raised by slave labor. The false 
reason for this was the discouragement of slavery. 
The true reason was that a few men, powerful sup- 
porters of Sir Robert Peel's administration, owned the 
sugar plantations in the West Indies, and their sup- 
port was needed to carry out the other reforms which 
he proposed. In March, 1845, ^^' Cobden again 



326 THE TARIFF AND THE TRUSTS 

moved in the House of Commons to appoint a select 
committee "to inquire into the causes and extent of the 
alleged existing agricultural distress and into the ef- 
fect of legislative protection upon the interests of land- 
owners, tenant farmers, and farm laborers." He con- 
tended that the present tariff on corn being subject to 
frequent changes created great uncertainty and in- 
security of tenure, since farmers would not lease land 
for long periods of time with no certainty as to the 
price of corn, saying, "Capital shrinks instinctively 
from insecurity of tenure, and we have not in England 
that security which will warrant men of capital invest- 
ing their money in the soil." He declared the funda- 
mental fallacy of protection to be "Taxing the whole 
community for the benefit of a section," and argued 
that a law which impoverished men destroyed their 
capacity for consumption, and therefore injured manu- 
facturing, saying, "There are 960,000 agricultural 
laborers in England and Wales, and each of them does 
not spend 30s. a year in manufactures on his whole 
family if the article of shoes be excepted." In con- 
clusion, he appealed to the landowners, the high aris- 
tocracy of England, "To play in a mercantile age that 
noble part which in feudal times had made their an- 
cestors the leaders of the people." Of his speech Mr. 
Morley says: "The Prime Minister had followed 
every sentence with earnest attention ; his face grew 
more and more solemn as the argument proceeded. 



HOW ENGLAND GOT FREE TRADE 327 

At length he crumpled up the notes which he had been 
taking and was heard by an overlooker to say to Mr. 
Sydney Herbert, who sat next him on the bench, ^You 
must answer this, for I cannot/ " 

The end of the corn duties was at hand. Famine 
had joined hands with the Anti-Corn Law League. 
The diet of the Irish people at this time was largely 
potatoes. In some parts of Ireland they were almost 
the only produce of the land and the sole means of 
subsistence. In the middle of October, 1845, the crops 
were attacked by blight, and the people were threatened 
with famine. Anxious correspondence took place be- 
tween Sir Robert Peel and Sir James Graham, a mem- 
ber of his Cabinet, and a commission to inquire into 
the state of the potato crop was sent to Ireland. In 
Manchester and throughout England the League held 
vast meetings and appealed to government to grant 
relief by opening the ports. On October 27th Sir 
Robert Peel wrote to Sir James Graham, 'The Anti- 
Corn Law pressure is about to commence, and it will 
be the most formidable movement of modern times. 
Everything depends upon the skill, promptitude, and 
decision with which it is met." Daniel O'Connell, who 
had long been a member of the League and who had 
fought its battle in Ireland almost single-handed, sent 
accounts from Ireland of the terrible conditions, and 
demanded that party conflict should be laid aside in 
the presence of the great calamity impending over his 



328 THE TARIFF AND THE TRUSTS 

people. On the 31st day of October Sir Robert Peel 
proposed to his Cabinet that the ports should be opened 
to the admission of foreign grain by an Order in 
Council and that Parliament should be called together 
not later than the 27th of November. They separated 
without coming to a conclusion and again came to- 
gether on the 6th day of November. The proposals 
of the Prime Minister were supported by only three 
members, the Earl of Aberdeen, Sir James Graham, 
and Mr. Sydney Herbert. On the 22d day of No- 
vember Lord John Russell, the leader of the Whig 
party, who was in Edinburgh watching the progress 
of events, wrote an open letter to his London constitu- 
ents in which he said : "I used to be of the opinion 
that corn was an exception to the general rules of politi- 
cal economy," but that he had changed his opinions, 
and at last had become convinced of the folly of the 
whole protective system. He concluded his letter as 
follows : *'Let us, then, unite to put an end to a system 
which has proved to be the blight of commerce, the 
bane of agriculture, the source of bitter divisions among 
classes, the cause of penury, fever, mortality and crime 
among the people." Sir Robert Peel, with Lord 
Russell's letter before him, because of the disagree- 
ment in his Cabinet, tendered to the Queen his resig- 
nation as Prime Minister, and the Queen accepted it, 
and called upon Lord John Russell to form a Ministry. 
He was unable to do so, and her Majesty recalled Sir 



HOW ENGLAND GOT FREE TRADE 329 

Robert Peel and asked him to resume office. All of 
his prior associates, with the exception of Lord Scan- 
ley, agreed to act with him, and he returned to office 
relieved from his party pledges and proceeded to pre- 
pare measures for abolishing the Corn Laws. The 
League, however, were active, and at a great meeting 
in Free Trade Hall at Manchester on the 23d of 
December determined to raise a subscription of £250,000 
for carrying on their work. Of this meeting at Man- 
chester Mr. Morley says : "The scene has often been 
described how one man after another called out in 
quick succession 'A thousand pounds for me/ *A 
thousand pounds for us,' and so forth until in less 
than a couple of hours i6o,ooo had been subscribed 
on the spot. There were 23 persons or firms who put 
down f 1000 each, and 25 persons half as much." On 
the 20th of January, 1846, the Queen opened Parlia- 
ment, and in her address recommended in general 
terms a revision of the tariff. Sir Robert Peel, in 
addressing the House of Commons, stated that he had 
closely watched the operation of protective duties dur- 
ing the past four or five years, and was now convinced 
that the arguments in favor of their maintenance 
were no longer tenable. He was convinced that high 
wages were not the result of high prices of food. He 
stated in detail to the House the increase in the amount 
of exports since the revision of the tariff in 1842, but 
did not disclose to the House his intention to propose 



330 THE TARIFF AND THE TRUSTS 

a repeal of the Corn Laws. On January 27, 1846, he 
proceeded to disclose fully the changes contemplated, 
carefully presenting all the duties upon manufactured 
articles which were to be removed, and the reasons 
for their removal, and finally completed by proposing 
the repeal of the Corn Laws, to take effect in 1849, 
with a largely decreased duty in the meantime. The 
first reading of his bill was carried by a majority of 
337 votes, made up largely of Whigs and Free Traders, 
to 240, opposed. The motion was made to go into 
committee on the resolutions on the 9th of February, 
1846, and after twelve nights of debate and one hun- 
dred and three speeches, by a majority of 97, the bill 
was finally passed, sent to the House of Lords, and 
there, through the influence of the Duke of Wellington, 
passed and returned to the Commons on the very night 
when the indignant landlords, uniting with the Whigs 
and with O'Connell, defeated the Coercion Act of the 
government applying to Ireland, and Sir Robert Peel 
resigned his office. In announcing his resignation 
Peel made an eloquent speech in which he ascribed to 
Cobden the chief credit of passing the Corn Bill, saying, 
*/The name that ought to be associated with the suc- 
cess of the measure is the name of a man, who, acting, 
I believe, from pure and disinterested motives, has 
advocated this cause with untiring energy and by ap- 
peals to reason/' A few days later, at the Free Trade 
Hall in Manchester before thousands of people, Cobden 



HOW ENGLAND GOT FREE TRADE 33 1 

said of Sir Robert Peel : "If he has lost office he has 
gained a country/' 

In 1852 Mr. Gladstone became Chancellor of the 
Exchequer and proceeded to complete the policy of Sir 
Robert Peel. He removed the duties on 123 articles 
and reduced those on 133 others, including most of 
the remaining duties on food. In i860 he resumed 
the task, and reduced the number of taxed imports to 
48, removing the last duty on manufactures of wool 
and silk and all differential duties. The timber duties 
were abolished in 1866, the shilling registration duty 
on corn in 1869, and the duty on sugar in 1875. The 
English tariff now is very simple, being levied on only 
fifteen classes of goods and for revenue only. Of 
these tobacco, tea, spirits, and wine produce about nine- 
tenths of the whole customs revenue of £21,250,000. 
The landowners and farmers enjoyed for a period of 
twenty-five years after the repeal of the Corn Laws 
such prosperity as they had never known, the price of 
their products as well as of their labor having greatly 
increased. The wealth of the United Kingdom in 
1840 was $20,000,000,000. In a paper read before the 
British Association in September, 1903, the great 
statistician. Sir Robert Giffen, estimated the wealth of 
the United Kingdom of Great Britain at $75,000,000,- 
000, equal to that of Germany and France combined. 
The people of Great Britain receive upon their invest- 
ments in foreign countries and in their colonies $500,- 



33^ THE TARIFF AND THE TRUSTS 

ooo^cxxD yearly. The ship-owners of Great Britain re- 
ceive from freights and charter moneys of their ves- 
sels in the neighborhood of $500,000,000 more. Since 
1840 pauperism has decreased fifty per cent., and the 
price of labor increased about seventy-five per cent., 
and the cost of the necessaries of life decreased nearly 
half. Great Britain exports of highly manufactured 
articles nearly as much as Germany and France com- 
bined. Mr. Gladstone, speaking to the electors of Mid- 
lothian in the month of November, 1885, said: ''I do 
not deny that there is distress, but it is less than it was 
before the free-trade reformation. When that reform 
began trade increased to a degree unexampled in the 
history of the world . . . The country has made a 
great step forward, and will not go back." Then 
pointing to the mountains in the distance, he said: 
"You might as well try to uproot the Pentlands from 
their base and fling them into the sea." In the con- 
test of 1905 the issue was squarely drawn between the 
Conservatives, led by Joseph Chamberlain, advocating 
differential duties against foreign countries and duties 
to be agreed upon with her free colonies, and the 
Liberals, Nationalists, and Labor Party on the other 
side. The result was that the Liberals elected 385 
members of the House of Commons, the Nationalists 
84, and the Labor Party 43, while the Conservatives 
elected only 158, giving the free traders 512 out of the 
670 members in the House of Commons. 



CHAPTER X 



THE TARIFF IN GERMANY 



The history of Prussia and of the German states 
prior to the nineteenth century is one of universally 
restricted trade. Every district in Germany regarded 
its neighbor as foreign, and every locality had its special 
tariffs. The guilds still existed; the petty barons 
exercised jurisdiction over the commerce upon rivers, 
those of the Rhine imposing tolls upon boats, and all 
attempts to trade were hampered with regulations. 
The leading idea of Frederick the Great was to make 
Prussia a self-sustaining state. He erected barriers 
around her frontiers for the purpose, not only of re- 
stricting imports, but of preventing exports. He for- 
bade the introduction of any class of goods into 
Prussia that could be produced at home. He was 
wise enough, however, to know that it was better 
policy to export manufactured goods than raw materi- 
als, since in that case the foreigner was purchasing the 
labor of the exporting country, so he forbade the ex- 
port from Prussia of raw material. If the foreign- 
er's goods were not sought, the foreigners themselves 
were welcomed, and the Thirty Years War having de- 

333 



334 THE TARIFF AND THE TRUSTS 

populated the country and destroyed its wealth, he 
sought immigration from Holland and France. He 
encouraged the small peasant proprietors, aided them 
by subsidies, built roads and canals, did away with the 
ancient guild system, encouraged foreign trade enter- 
prises by establishing trading companies, and made 
Prussia, so far as his powerful will could accomplish 
it, a self-sustaining state. At the beginning of the 
last century Prussia was one of the great agricultural 
states of Europe, eighty per cent, of its inhabitants 
following the occupation of agriculture. During the 
reign of Frederick William HI and under the wise 
statesmanship of Stein and Hardenburg, Prussia was 
given greater freedom in thought, in speech, in action, 
in trade, in industry, and in government. In the 
second decade of the nineteenth century the direct 
encouragement of industry by state aid ceased, to be 
renewed only in recent times. A Cabinet order is- 
sued by Frederick William HI from Carlsbad, August 
I, 1817, declared that the principle of free import of 
foreign manufactures in return for a small duty should 
be the basis of the legislation of the Prussian state for 
all future time. Some slight reaction inspired by the 
teachings of Fredrich List occurred later, but so free 
was the trade of Prussia that William Huskinson ex- 
pressed a hope in the House of Commons in 1825 that 
the time would come when England would follow 
Prussia's example. 



THE TARIFF IN GERMANY 335 

In 1817 the representative of Wurtemburg in the 
Federal Diet brought forward a proposition for the 
confederation of the German states for commercial 
and customs purposes on the basis of the Prussian 
Law, and later, between 1819 and 1833, a customs 
union known as the Zoliverein, between eighteen 
states, with a population of 23,000,000 people, was 
concluded to continue for a period of eight years. 
Before those years had expired several other states had 
joined the union, the customs duties being levied for 
the common account and divided among the contract- 
ing states according to population. In 1867, by treaty 
between the North German Confederation and South 
German States, a new customs union was concluded, 
with a Parliament armed with legislative powers in 
customs matters for a period of twelve years. Two 
years later the customs laws and ordinances of the 
Union were modified, and they passed into the legis- 
lation of the New Empire, becoming substantially the 
basis of the new fiscal system which lasted until 1879. 
The late Professor Albert Schaffle writes of this cus- 
toms union as follows : ''Until the beginning of the 
sixties, under a largely bureaucratic treaty system of 
administration, the Zoliverein maintained a commercial 
policy which, while moderately protective and fairly 
stable, yet slowly and cautiously aimed at freedom of 
trade." The conclusion of Prussia in 1862 of a treaty 
of commerce with France, came into operation through- 



33^ THE TARIFF AND THE TRUSTS 

out the entire area of the ZoUverein in 1865, and gave 
a stimulus to the new movement. Prince Bismarck 
carried that treaty through the Prussian ParHament, 
and he was at that time not only a free trader, but the 
favorite of the free-trade party. After the French 
treaty and during the sixties the free-trade sentiment 
among German manufacturers and educated men in- 
creased. On August 27, 1867, a Congress of political 
economists and representatives of industry was held at 
Hamburg, and they called for the immediate revision 
of the customs tariff in a free-trade spirit. It was 
recommended that the tariff should henceforth be re- 
stricted to a few articles chosen for their suitability as 
sources of revenue, and that thus, ''by abolition of the 
protective system, larger resources might be secured 
to the community and the state, and elbow-room be 
given for the economic activity of the individual." In 
1868 the duties on wine were reduced, in 1869 those on 
sugar, then came, in 1873, the reduction of the iron 
duties, and finally, in 1875, a law was enacted provid- 
ing for their entire disappearance, to take effect from 
the first day of 1877. The abandonment of the pro- 
tectionist policy was the work of three Prussian Min- 
isters : Martin Friedrich Rudolf Delbruck, Otto 
Camphausen, and August von der Heydt. The trend 
of opinion among competent observers seems to be that 
the tariff policy of the ZoUverein, with interstate free- 
dom of trade, opened up great possibilities of internal 



THE TARIFF IN GERMANY 337 

growth, and that the moderate tariff which it estab- 
Hshed was a shelter especially against English com- 
petition and tended to lay the foundation for the recent 
growth of manufacturing. 

The Franco-German War transformed Germany. 
The French indemnity was paid over long before it 
had been expected and was expended too rapidly for 
Germany's good. Of this indemnity a German writer 
says: 'Tt broke over us like a waterspout carrying 
devastation everywhere, whereas, if it had fallen 
gradually in the course of time and in small quantities, 
it might have been beneficial in an extraordinary de- 
gree." Bismarck, in a speech before the Reichstag 
made May 2, 1879, said: 'T do not know what the 
Empire would do with a superabundance of money; 
we had it when the French milliards came to us, and in 
the spending of it we got ourselves into a certain 
amount of perplexity." The perplexity which Bis- 
marck speaks of was that the milliards were spent 
rapidly in the building of railways, fortifications, pub- 
lic works, and buildings, and gave an undue impetus to 
industry. Between 1871 and 1873, 843 new pubHc 
companies were formed in Prussia, more than four 
times the number which had existed at the formation 
of the Empire, and by 1877 half or more of them had 
gone into liquidation. Directly when the expenditure 
on state and public works ceased stagnation began; 
men found themselves in the possession of works and 
22 



338 THE TARIFF AND THE TRUSTS 

plants which had been built or extended on an exces- 
sive scale in order to meet the temporary prosperity. 
By 1878 industrial depression had reached a climax 
and thousands of laboring men were walking the 
streets without work and manufacturers were clamor- 
ing for a stimulant. These are exactly the conditions 
in which protective tariffs arise. Again, united Ger- 
many had just become a nation and the cry of the 
people was, "Let our institutions be made truly na- 
tional; let us become independent economically as 
well as politically; let us become a self-controlled, 
self-supporting Empire." These facts account for the 
popular demand for the protective tariff which was 
enacted in 1879. 

Bismarck was Chancellor when the reductions in 
duties had occurred in 1873 and 1875, and had always 
declared himself a free trader. On October 19, 1849, 
speaking in the Prussian Lower House, he said : "The 
Deputy for Crefeld regards the protective duty as a 
protection of the manufactories against foreign coun- 
tries, while I, on the other hand, regard it as a pro- 
tection against the liberty of the native population to 
buy where it may appear cheapest and most convenient ; 
in other words, the protection of the home country 
against the home country. Protective duties and 
compulsory guilds impose a sacrifice upon the part of 
the population for the benefit of the other part, espe- 
cially the obligation to buy goods at a higher price than 



THE TARIFF IN GERMANY 339 

would Otherwise be the case, in order that this other 
part of the population may be ensured bread and be 
protected. But protective duties have also the disad- 
vantages that in the main they only enrich a few fac- 
tory proprietors. This is their sole result, for I have 
never seen that factory operatives have put away large 
savings or become rich." The Imperial Constitution 
adopted in 1871 had provided, that in so far as the 
expenditures of the Empire were not covered by reve- 
nues set apart for its special use, the deficiencies should 
be made up by contributions from the Federal States 
according to population. These were known as ma- 
tricular contributions and their aggregate amount was 
fixed each year in the Imperial Budget. This depend- 
ence of the Empire upon aid from the several states 
was irritating to Bismarck. He wished to provide 
the Empire with a sufficient independent revenue, so 
that it need no longer rely on the states and their legis- 
latures, and declared the system unjust because based 
upon population irrespective of considerations of 
wealth. On November 22, 1875, in the Reichstag, he 
said: ''Speaking entirely from the standpoint of the 
Empire, I seek as great a reduction as possible, if not 
the complete abolition of the matricular contributions. 
It is scarcely disputed that the form of the matricular 
contributions is one that does not fall upon the con- 
tributary states in proportion to their capacity. I 
might say that it is a crude form which may serve as 



34^ THE TARIFF AND THE TRUSTS 

a makeshift so long as we are not dOie to provide the 
Empire in its early youth with revenues of its own. 
If, however, it is acknowledged that it is a tax which 
is not just in its incidence, it cannot be regarded as a 
means of consolidating the Empire/' Again he said: 
''The great cement of a strong common financial sys- 
tem is lacking to the Empire so long as it is founded 
only on matricular contributions. That these contri- 
butions fall unequally is a question of justice, but to 
diminish them is in my opinion the task of a well-con- 
sidered Imperial policy." And again in the same 
speech he said : ''The consolidation of the Empire will 
be promoted when the matricular contributions are re- 
placed by Imperial taxes." On May 2, 1879, advocat- 
ing the passage of the first tariff act of the Empire 
before the Reichstag he said : "The first motive which 
impels me in my political position as Imperial Chan- 
cellor to enter upon such a reform is the need of the 
financial independence of the Empire. This need was 
recognized when the Imperial Constitution was drawn 
up. That Constitution presumes that the system of 
the matricular contributions should be a temporary 
one and should only last until Imperial taxes were 
introduced . . . We ask for a moderate protection of 
national labor. We are far removed from any system 
of prohibition such as exists in most neighboring coun- 
tries, as, for example, in America, which was formerly 
our principal buyer, where the duties average from 



THE TARIFF IN GERMANY 34I 

60 to 80 per cent, ad valorem/' Not only was Bis- 
marck interested in consolidating the Empire and re- 
moving it from dependence upon aid from the several 
states, but he desired to establish a great army and 
navy and to make the German Empire the most for- 
midable state of Europe. To accomplish that end, 
the people must be heavily taxed, and he was anxious 
to extract the money from the people's pockets without 
their knowing that he had taken it. The German 
Empire was entirely free from debt in the year 1875. 
To-day it has a national debt of nearly a billion dol- 
lars, while the debts of the Federal States have largely 
increased, the aggregate debt of the Empire and the 
states being now close on to four billion dollars. On 
May 21, 1869, speaking in the Prussian Diet, he said: 
'^Direct taxes always press on the taxpayers with a 
certain angular brutality." And on November 22, 
1875, speaking in the Reichstag, he said: ''I declare 
myself as essentially favorable to the raising of all 
possible revenue by indirect taxes, and I hold direct 
taxes to be an onerous and awkward makeshift. In- 
direct taxes, whatever may be said against them theo- 
retically, are, in fact, less felt. It is difficult for the in- 
dividual to calculate how much he pays and how much 
falls upon his neighbor, but he knows how much in- 
come tax he pays." A little later he said: ''Those 
who want to see the electors dissatisfied with govern- 
ment will hold fast to the direct taxes; those who 



342 THE TARIFF AND THE TRUSTS 

seek to promote content in the population will be more 
for indirect. That is the result of practice and ex- 
perience, and I need not develop the sociological 
reason for it. Whoever offers opposition wants to see 
discontent amongst the people, and will devise means 
to find it and to excite it by representing the govern- 
ment as incapable, malevolent and perhaps only as 
clumsy." Here you have the secret why the German 
Empire adopted a different policy than the ZoUverein. 
Here you have the cry of every ruler ambitious to 
consolidate and increase his power : ''Get the money 
out of the people for governmental purposes without 
their knowing it." Despotic government is almost 
impossible with direct taxation. Every revolution in 
English and American history has come out of deter- 
mined opposition to an unjust direct tax. Direct tax- 
ation is almost necessary to the existence of free gov- 
ernment. Vigilance on the part of the people in 
watching the affairs of government is practically im- 
possible without direct taxation. Take their money 
from the people without their knowing it, and by and 
by you can take their liberties also. 

The tariff bill received the Imperial assent on July 
7, 1879, and went into effect on January i, 1880. The 
duties imposed were intended to be revenue producing 
and not prohibitive, and amounted upon the aggregate 
to about 20 per cent. Many non-competitive articles, 
like coffee, tea and petroleum, were singled out for 



THE TARIFF IN GERMANY 343 

Special taxation on account of their productiveness of 
revenue. Duties were imposed upon wheat, rye, oats, 
barley, and other agricultural products, but the duties 
compared with the recent tariff were very low. Em- 
peror William was a pronounced protectionist, and on 
July 20 he wrote to his Chancellor as follows : "I must 
now congratulate you on the victory you have gained 
in the Reichstag on the question of the customs tariff 
reform. To your many outside victories must now be 
added this one on internal financial questions. You 
undertook to stir up a wasp's nest, and I sided with 
you from conviction, although I feared the result of 
your enterprise. It is rare that such a complete change 
of public opinion has been achieved in such a short 
time, and one sees that, after immense work and effort, 
you hit the right nail on the head. Some damage may 
have been done in the process, but a majority of l6o 
votes is a triumph which will sweeten many of your 
bitter hours of preparation and fighting. The Father- 
land will bless you for this; although the Opposition 
may not do so." Germany's return to protection 
created a general reaction among her neighbors. 
Russia, Austria and France increased their duties in 
1881 and 1882. 

Instead of the duties improving the condition of 
agriculture by 1885, the prices of wheat and rye were 
lower than they had been for thirty years. Many in- 
dustries like soap and perfumery, the machine trades 



344 THE TARIFF AND THE TRUSTS 

and the clothing trades had petitioned the government 
to remove the duties upon their raw materials. By 
1885 such depression had come that industries again 
appealed to the state to protect them from foreign com- 
petition, and Prince Bismarck prepared a bill that be- 
came law revising the tariff in the line of further pro- 
tection. Two years passed, and the agricultural party 
again reminded the government of its obligation to 
protect agriculture, and in 1887 ^ further increase of 
duties on corn and live stock was given. The wages 
of the working classes slightly increased, but dearer 
food, rising rents, and heavier taxation counterbalanced 
this, and the actual condition of labor was worse than 
before 1879. By 1891 a crisis was at hand, the harvest 
had failed, the price of corn rose to an alarming height, 
the people were hungry, popular demonstrations and 
riots took place in Berlin, and the larger cities of Ger- 
many, and the corn duties had to be suspended. 

Bismarck had retired from office and Count Caprlvi, 
an army officer, held the office of Chancellor. The 
agrarians, whose political activity had brought about 
the tariffs of 1885 and 1887, regarded Caprivi as out 
of sympathy with their desires. He was neither rich 
nor a landowner, and during his administration they 
fought him step by step, and finally forced the Emperor 
to remove him. Caprivi believed that Germany had 
brought about her commercial isolation by her tariffs, 
and he proposed to return to the policy of lower duties 



THE TARIFF IN GERMANY 345 

by commercial treaties with foreign countries, as the 
existing tariffs were about to expire. Russia, Italy, 
Switzerland, and Spain had notified Germany of their 
intention to increase their tariffs, and Caprivi averted 
this by negotiating treaties. In December, 1891, the 
Chancellor laid before the Reichstag a series of treaties 
with Austria-Hungary, Italy, Switzerland, and Belgium 
intended to come into force February i, 1892, and to 
last until December 31, 1903. These treaties fixed the 
duties in each country for a period of twelve years, 
making mutual concessions to the extent of admitting 
many articles free. Germany subsequently negotiated 
treaties with Rumania, Servia, Nicaragua, Japan, and 
Spain ; but France and Russia, with some of the smal- 
ler states, adhered to the policy of customs autonomy. 
Russia in 1891 had enacted a highly protective tariff, 
which bore with special severity upon Germany. 
Caprivi was willing to enter into a treaty with Russia 
reducing the duties on foodstuffs, but only on the con- 
dition that Russia should in return lower the duties 
on German industrial products. Negotiations were 
carried on for some time, but no agreement could be 
reached and Russia announced by Imperial order her 
intention of enforcing her maximum tariff against 
Germany. The German government resorted to re- 
taliation, and not only enforced their maximum tariff, 
but increased the duties imposed on Russian goods by 
50 per cent. Immediately the Russian authorities re- 



346 THE TARIFF AND THE TRUSTS 

plied by increasing their maximum tariff by 50 per 
cent, against German goods and increasing the dues 
payable by German shipping in Russian ports. A 
tariff war between these two countries was on, and it 
lasted from August i, 1893, to March 20, 1894. Then 
negotiations were taken up, and Russia lowered her 
tariffs on 120 articles in the importation of which 
Germany was interested, while she secured in return 
lower duties for her grain exports to Germany, although 
the German agrarians fought with all their power to 
continue the war. 

Our relations with Germany during the period be- 
tween 1 89 1 and the new tariff of 1903 were controlled 
by the treaty with Prussia of May i, 1828, and later by 
the convention of the loth of July, 1900, by which we 
extended to Germany the concessions yielded to France, 
Italy, and Portugal and in return received the advantage 
of the German conventional or minimum tariff. In 
making these tariff treaties the German government 
had in their own words "declined to consult the various 
industries concerned, believing that in not obtaining 
the advice of interested parties they would be less 
biased than they might otherwise have been." How 
different this from our methods of making a tariff. 
We not only consult the manufacturers exclusively, 
but our Congressmen allow them practically to write 
the schedules. Everybody is given all they ask for, 
especially if they have contributed freely to the national 



THE TARIFF IN GERMANY 347 

campaign fund of the successful party. Such a 
thought on the part of Congressmen as the propriety of 
obtaining expert knowledge from disinterested sources, 
instead of consulting the very men who are to be al- 
lowed by the duties to increase their prices to the 
American people, is unknown for the last thirty years. 
The Emperor, in recognition of the success of 
Caprivi in making these treaties, conferred the title of 
Count upon him, and wrote of him as follows : "That 
simple, homely Prussian General has in two years suc- 
ceeded in making himself conversant with and in mas- 
tering problems of extreme difficulty, with a rare polit- 
ical insight. He has, at the right moment, saved the 
Fatherland from evil consequences. I believe that the 
achievement represented by the introduction and con- 
clusion of the treaties of commerce will prove for 
posterity one of the most important historical events, 
and is literally an act of vital moment. I am convinced 
that not only our Fatherland, but millions of the sub- 
jects of other countries which are united to us in the 
great Customs League, will sooner or later bless this 
day." Notwithstanding these kind words from the 
Emperor, the agrarians had sufficient power with him 
to force Caprivi from office and place in his stead 
Prince von Hohenlohe-Schillingsfiirst, one of the larg- 
est landed proprietors in the Empire and one of the 
leaders of Agrarianism. During the continuance of 
the treaties Germany was especially prosperous. For 



348 THE TARIFF AND THE TRUSTS 

a period of six years after the treaties came into efifect 
her exports increased by tens of miUions yearly. The 
Berlin Merchants' Association said in 1896: 'Tt must 
be conceded that the treaties certainly have had those 
favorable consequences for Germany's export trade 
which impartial judges predicted would result from 
them. In fact the commercial and industrial activity 
which has been so apparent in Germany since 1894 is 
directly due to these treaties." Professor Lujo 
Brentano, writing in 1902 of the effect of the com- 
mercial treaties, said : "In fact, since the conclusion of 
the Caprivi commercial treaties, the wealth of Germany 
has increased as in no equal period of its long history 
before; the population has rapidly grown; emigration 
has fallen to a figure unknown in the history of the 
whole nineteenth century, and other nations, full of 
astonishment, envy us this.'' 

We have now reached a point of German history 
which immediately concerns the people of the United 
States, and that is the von Bulow Tariff, which went 
into effect on the ist day of March last, the effect of 
which is suspended as to the United States for one 
year. That tariff is the direct result of the agitation 
of the agrarians, and we cannot understand the situa- 
tion without knowing who they are, what objects they 
have in view and how they accomplish their ends. 
Their leaders are the great landowners of Prussia and 
Germany. In round numbers 25,000 large landowners 



THE TARIFF IN GERMANY 349 

divide between themselves one- fourth of the land of 
the whole German Empire, then come 281,000 large 
peasant proprietors owning together one-third, mak- 
ing 306,000 persons owning fifty-four per cent, of the 
soil of the country. The remaining part of Prussia 
and the German Empire are owned by 5,250,000 small 
cultivators who own the land divided into small farms 
averaging not to exceed five acres, barely sufficient to 
raise grain for the support of themselves and their 
families. Thus the Agrarian Party has about 300,000 
large landowners who are benefited by high protective 
duties upon grain. Many of these men are members 
of the Conservative or National Liberal party and have 
seats in the Council or the Reichstag, and, having but 
one object in view, namely to secure benefits for them- 
selves, by throwing all other considerations aside, they 
have made themselves tlie dominating power of the 
German government. Apart from the will of the 
Kaiser and the Federal Council, Germany can neither 
make nor unmake a law. At the same time, without 
the consent of the Reichstag, no statute can be passed. 
The agrarians are willing to vote for any legislation 
which the Emperor desires if he in return will permit 
them to dictate the tariff upon agricultural products. 
The result is that the government has to purchase 
their support at the cost of the people in exactly the 
same way that political parties in this country purchase 
the support of the captains of industry at the expense 



350 i'HE TARIFF AND THE TRUSTS 

of our people. So thoroughly bigoted are the agra- 
rians, so solely have they only their own interests in 
view, so indifferent are they to the welfare of their 
country, that when the government a few years ago, 
perceiving that a system of canals from the Rhine to 
the Elbe would facilitate the carriage of produce from 
one side of the country to the other, sought to pass a 
law through the Prussian Landtag authorizing the 
construction of such a system, the agrarian landowners 
of Prussia defeated the law upon the ground that the 
carriage of American grain into the interior would 
neutralize the effect of the duties on grain. One of 
the leaders of these agrarian junkers is Count Kanitz, 
an East Prussian nobleman and a type of the whole 
junker class. On April 7, 1894, he proposed the pas- 
sage of a law in the Reichstag directing that the state 
should purchase outright all the corn imported into the 
country and retail it at prices which should not be be- 
low a favorable average of past years, the idea being 
that the market price of corn thus sold out of the pub- 
lic granaries would determine the price of the entire 
amount of grain produced at home. Prince Hohenlohe, 
the Chancellor, himself an agrarian, declared that he 
would not countenance such a dangerous step towards 
socialism, and to this statement Bebel, the Social Demo- 
cratic leader in the Reichstag, retorted that to enrich 
a single class at the expense of the community was not 
socialism, that socialism proposed that the government 



THE TARIFF IN GERMANY 35 1 

should own all property for the benefit of all. The 
Agrarian Party has a large membership, raises con- 
siderable sums of money for carrying on its work and 
supports a large staff of itinerant lecturers whose busi- 
ness it is to organize the agricultural classes, to instruct 
them as to the grievances of the landowners, to marshal 
them at election, and to see that they vote for agrarian 
candidates. The agrarians are most useful to the 
Emperor in his struggle with the socialists, carrying 
on in his behalf an active campaign against socialism. 
In 1900 an unpleasant incident, which seemed quite like 
the conditions in our own country, brought out in 
strong light the danger of an alliance between the gov- 
ernment and a protected interest. A high official of the 
Imperial Home Office was proved to have accepted a 
contribution of $3,000 from the Central Association of 
German Industrialists for use in the promotion of anti- 
socialistic measures. When that official was interro- 
gated in the Reichstag he acknowledged the truth of the 
allegation and accepted responsibility for the act of his 
subordinate. In 1900 the agrarians found the Emperor 
at their mercy when the bill for an enlarged navy was 
introduced in the Reichstag, and they gave him the 
choice of abandoning any increase in the navy or com- 
mitting the Empire to the policy of protection run mad. 
The Emperor, to save his army and navy, surrendered 
to the army of agrarians. The result was that when 
Count von Biilow became Chancellor in October, 1900, 



352 THE TARIFF AND THE TRUSTS 

with the fate of Caprivi to warn him, he capitulated 
before a crusade of the agrarians and consented to the 
tariff of 1903, the maximum duties of which are, after 
those of Russia, the highest in Europe. This tariff 
was brought about in this way: The agrarians are 
represented largely among the Conservatives, the Free 
Conservatives, the National Liberals, and the Anti- 
Semites, four of the ten parties in the German Reich- 
stag, and being willing to grant anything to these or to 
any other party in the Reichstag if they can attain their 
own ends, they have become all-powerful. When a 
new tariff was determined upon in 1900, they invited 
in the representatives of manufacturing and said to 
them: "You may have any duties you desire, but in 
return you must give us such duties on our products 
as our interests require. Give us so much duty upon 
wheat and rye, and we will give you as much as you 
wish upon iron. Give us so much upon beef and pork, 
and we will give you so much upon woolen and cotton.'' 
In this manner, which we understand thoroughly in the 
United States, the recent tariff w^as made. This tariff 
consists of what is known as a general tariff and a con- 
ventional tariff'. The highest duties are found in the 
^'general tariff/' and are intended to be used as a club 
to compel foreign countries to enter into commercial 
treaties with Germany, reducing their own duties; in 
case they do so sufficiently to satisfy the German gov- 
ernment, it gives them the advantage of the lower 



THE TARIFF IN GERMANY 353 

duties known as the conventional tariff. The ^'general 
tariff" of Germany increases the prior duties on wheat 
114 per cent., flour 156 per cent., maize 212 per cent., 
wood 25 per cent., lard 25 per cent., bacon 80 per cent., 
pork 176 per cent., beef 200 per cent., rye 70 per cent., 
barley 100 per cent., oats 115 per cent. The duty on 
saccharine has been increased to 8000 marks per 100 
kilos. Agricultural machinery has been increased 88 
per cent., and so the increase of duties runs through all 
the products of agriculture, with a smaller increase up- 
on manufactures. These duties are as monstrous as 
those of the Dingley Bill, and have been brought about 
in the same manner. Such high duties would be of no 
value to our farmers because they export about one- 
third of their entire product; but the German land- 
owners do not produce wheat and other grains suffi- 
cient to meet the home consumption, and the result of 
their high tariff is the same as the result of our tariff 
upon manufactured products with trusts existing to 
make it effectual. It simply raises the price of the 
home product up to the duty line. 

The manner in w^hich this tariff was eventually passed 
IS worthy of attention. Every careful observer of the 
trend and current of legislation in this country has 
seen with apprehension the changed methods of enact- 
ing laws. Thirty years ago public measures were 
carefully prepared and thoroughly discussed before 
they were passed. Discussion on the part of leading 
23 



354 THE TARIFF AND THE TRUSTS 

members in Congress then availed something, because 
it changed men's opinions and votes ; but that time has 
passed. The party leader now marshals his party 
with military tactics and if a bill is especially bad, he 
jams it through without allowing discussion. In just 
this manner the German tariff was passed. There 
were 700 odd duties affecting manufacturing and 
agricultural products in the German tariff bill, and 
after it had been reported by the committee a combina- 
tion of Clerical, Conservative and National Liberal 
members, without permitting any discussion, moved 
the passage of the bill, and, in our American phrase, 
''jammed it through/' Of this tariff the Commercial 
Treaties Association, consisting of 20,000 members, 
its membership employing 1,500,000 men and represent- 
ing the industries of the whole German Empire, say : 
'The parties composing the majority in the Reichstag 
'have unfortunately succeeded in securing the adoption 
'of the customs tariff, which has been altered for the 
'worse by the amendments of the committee. The 
'Commercial Treaties Association consider it to be all 
'the more incumbent on them to persevere in the task 
'of endeavoring, by spreading information among the 
'people, to ensure that in the future German commer- 
'cial policy shall, in view of the greedy appetite of the 
'agrarians, be guided into moderate courses, and that, 
'as a first step, the result of the elections may furnish 
'a prospect of the reduction of the exorbitant duties 



THE TARIFF IN GERMANY 355 

''of the tariff, which are greatly to the prejudice of the 
^'internal economic conditions of Germany; the Com- 
"mercial Treaties Association will now, as before, con- 
''stantly endeavor by their active co-operation to pro- 
''mote the conclusion of advantageous commercial 
"treaties for long periods of time in the interest of the 
"overwhelming majority of the German people/' 

The result of this recent German tariff has been that 
Russia, Austria, and Switzerland, in answer to it have 
revised their own tariffs, and increased the duties in 
all points that affected German trade. Other European 
countries have increased their tariffs, and the result is 
that German industries, both for the purpose of pro- 
curing their raw material cheaper and for the purpose 
of introducing their manufactured articles into other 
countries without the payment of duties, have foimd it 
necessary to establish branches abroad. Dr. Eugen 
Moritz, in his work "Eisenindustrie, ZoUtariff und 
Aussenhanddel," enumerates 7 large iron works which 
have established as many branches in foreign countries ; 
16 machine works which have established 26 branches ; 
7 electrical companies which have established 20 
branches ; 7 textile companies which have established 10 
branches ; 9 chemical works which have established 16 
branches ; and 6 glass, cement and other companies 
which have established g branches. All the industries 
of Germany have gone into the hands of syndicates 
which regulate both the production and the sale of 



3S6 THE TARIFF AND THE TRUSTS 

hundreds of different plants. These are required to 
transact business entirely through the mediation of the 
syndicate and to conform to the regulations which are 
issued in the common interest by its officials. Among 
these is the Steel Works Association, formed in 1904, 
which has entire control of the domestic sales and ex- 
ports of all the iron and steel in the German Empire. 
The objects of this Association are to maintain a uni- 
form price list in the home market, generally as high 
as the duty will allow, and to prevent a reckless cutting 
of quotations abroad. All domestic competition is in 
this way destroyed, and the syndicates are able to sell 
products which they control at a price just below the 
tariff duty line of importation. These syndicates in- 
terrupt all connection between the manufacturer and 
the customer, and the result is that if the manufacturer 
quits the syndicate, he finds himself compelled to be- 
gin all over again. The effect is that the home pur- 
chaser is charged the largest amount which the tariff 
will allow, while the foreigner purchases German ex- 
ports in his own market at low prices. In Germany 
no disguise is made of the fact that very cheap selling 
in foreign countries is only made possible by dearer 
selling at home. 

Bismarck's idea in giving the landowners high duties 
upon their products was to induce laboring men in in- 
creasing numbers to work upon the farms and thus 
stamp out the socialism of the cities. He called the 



THE TARIFF IN GERMANY 357 

agricultural interests the stable element that would act 
as a counterpoise to the floating population of the 
towns which furnished the socialist members in the 
Reichstag. But the result has been directly the oppo- 
site from what he expected. The rural population in 
1871 was 64 per cent, of the people and the urban pop- 
ulation 36 per cent. Now the urban population is 
more than 54 per cent, and the rural population 46 per 
cent. 

The results of protection in Germany, if measured by 
the condition of agriculture and the condition of labor- 
ing men in the factories and upon the farms, is any- 
thing but assuring. Between 1871 and 1895 ^he agri- 
cultural population of Germany increased one per cent., 
while the industrial population increased fifty-seven 
per cent, and the commercial population sixty-seven 
per cent. The large landowner seldom follows agri- 
culture as a calling, and lives the leisurely Hfe of a 
nobleman or politician. The system of large ill-man- 
aged estates has been handed down in Germany from 
feudal times. The landowner's estate is generally 
mortgaged to the full extent which he can procure 
thereon. Protected by high duties, he is lulled into a 
condition of apathy and indolence. It having been ad- 
mitted that it is the duty of the state to protect agri- 
culture, it is unnecessary for him to resort to improved 
methods of farming or to exhibit enterprise in his 
work. The idea of self-help has been sapped out. The 



358 THE TARIFF AND THE TRUSTS 

state having assumed responsibility for making his 
business pay, it is hardly necessary for him to continue 
to shoulder the burden himself. It results from this 
condition that what is known as intensive farming 
does not exist to any considerable extent upon the large 
estates of Germany. Antiquated machinery and anti- 
quated methods prevail and the great landowners are 
the most backward of all Europe outside Russia. The 
condition of the laboring men, both in cities and upon 
the farm, is simply terrible. Mr. Andrew D. White, 
our former Ambassador to Berlin, gives this descrip- 
tion of the German laboring classes : ''The food of the 
poorer classes in Germany is wretched; in many of the 
great industrial centers human beings live like animals. 
The condition of the peasants in Prussia, Silesia and 
Thuringia is fearful. This terrible misery is hidden by 
the humanitarian political institutions which deceive 
the superficial foreign inquirer, but they are the merest 
disguise for the all-directing state, and already falling 
into ruins.'' The laboring classes upon the great es- 
tates are in a condition hardly to be distinguished from 
the serfs of a hundred years ago. In the great estates 
in the north and northeast of Prussia, in Pomerania 
and the Mecklenburgs the daily wage of an average 
laborer is about 20 cents a day the year round. In 
upper Silesia it is said there are hundreds of farm 
laborers who only receive from 12 to 14 cents a day. 
The custom is to give the farm laborer the use of a 



THE TARIFF IN GERMANY 359 

house and a small piece of land for tillage. A Berlin 
journal describes the homes of the east Prussian farm 
laborers as follows : ''The houses are small and dilapi- 
dated, and the walls falling in through age, being 
built in a very primitive manner of clay and wood. 
The owner hardly does anything at all in the way of 
repairs; the laborers themselves have to do all the 
necessary patching. No wonder, therefore, that the 
wind whistles unhindered through every niche and 
cranny, and that rain and snow sweep through the 
rent roof of straw. For each family there is but one 
small, narrow living room, with a bedroom and a 
little lumber room. The floor is of clay, uneven and 
full of holes ; a floor of brick is regarded as a luxury. 
The rifts in the walls are stopped up with rags, pieces 
of turf, etc. ; the windows have long been broken, and 
the holes are either covered with paper or are filled 
with rags, moss, or wisps of straw. The internal ar- 
rangements correspond — a couple of rickety chairs, 
a table, the indispensable 'settle,' and the clumsy bed- 
steads. The limited space is naturally insufficient to 
afford to the inmates sleeping accommodation suited 
either to rational or moral ideas, especially where 
there is a large family. Should there be a lodger, and 
he has to sleep on the floor perhaps with hens for 
company, he must not be surprised if the rain trickles 
down upon his head or the snow drifts an inch thick 
upon his bed-cover. When the frugal meals are 



360 THE TARIFF AND THE TRUSTS 

''being eaten it is no rare thing for sand and pieces of 
*'earth to fall through the holes in the rude plank ceil- 
''ing if the hens should be scratching above. It is by 
^'the provision of 'free dwellings' of this kind that the 
^'landowners manifest their much-vaunted solicitude 
*'for their laborers. In reality, the pigstyes of the 
"agrarians east of the Elbe are far better fitted up than 
"the miserable huts of the day laborers." The farm 
laborer, working for twelve, thirteen and fourteen hours 
a day, receives less than half the amount which the Eng- 
lish farm laborer is receiving, while the average pay of 
the operatives in the factories is about two-thirds of the 
average pay of operatives in the factories of England. 
The operatives in the German factories while receiving 
much less pay for a day's labor than the English opera- 
tives are mulcted in extra cost for all the necessaries of 
life in much the same way as the operatives in the 
American factories. During the last year or two the 
price of meat in Germany has gone up so rapidly that 
thousands of the laboring people are unable to purchase 
it. The Berlin Tageblatf recently said that a beef steer 
which cost $32.45 in Berlin in July, 1904, cost $34.40 
in July, 1905, and $36.87 in July of the present year. 
In September last the price had risen to $41.75. The 
price of other meats has gone up in the same ratio, 
and the government, in league with the agrarians, seems 
to be doing everything it can to make the cost of liv- 
ing so high that the operatives in the German factories 



THE TARIFF IN GERMANY 361 

cannot enjoy the common necessaries of life. In 1904 
the government practically prohibited the importation 
of American hogs, and in the same year forbade the 
importation of hogs from Belgium, Holland and Eng- 
land. In 1895 it stopped the importation of pork from 
Denmark. In 1900 it prohibited all imports of sansages 
and canned meats, and stringent regulations against the 
importation of cattle on hoof have recently been en- 
acted. The result is that the German operatives and 
farm laborers know little of the comforts enjoyed by 
the English and the American laboring man. In about 
every German city you will find markets for the sale of 
horseflesh, and it is largely eaten by the laboring class- 
es. Our American farmers will never have reason to 
fear competition with the farmers of the German Em- 
pire. A German critic well describes the great German 
landowners in the following language: "Instead of 
^'meeting foreign competition, helped as it is by the use 
"of the most advanced technical improvements and by 
"the intelligent management of the estates, the Junkers 
"fall back, with lamentation, upon the support of the 
"State in the form of protective duties and export pre- 
"miums ; and instead of paying and treating their labor- 
"ers decently, training them to greater productivity, and 
"interesting them in their work, they do exactly the op- 
^'posite, and build their expectations upon reactionary 
"coercive measures which shall bring the laboring men 
"still further under their heel. A well-paid energetic 



362 THE TARIFF AND THE TRUSTS 

''laboring class would at once put an end to the labor 
''problem on the land, not simply because it would be 
"able to work in general more efficiently than the pres- 
"ent exhausted helots, but because it would facilitate 
"the extended use of machinery, now comparatively 
"little employed in agricultural operations. At present 
"it is naturally difficult to procure good and capable 
"laborers for this machinery, but the blame rests en- 
"tirely with the large proprietors, and particularly with 
"the Junkers, who have done everything they could to 
"make it impossible for intelligent workmen to live on 
"the land/' 

The chemical industry in Germany is worthy of at- 
tention. For many years the great chemical plants 
have had in their employ the professors of chemistry in 
the different universities. In no other line have German 
patience and thoroughness been rewarded by such great 
industrial results. These professors not only have 
made important discoveries themselves, but have de- 
veloped into practical results the discoveries of the 
English chemists. The present annual value of 
Germany's chemical products is upwards of $300,000,- 
000. During the last fourteen years her imports of 
chemicals have been stationary, but her exports have 
more than doubled, amounting to considerably above 
$100,000,000. 

The protectionists of Germany no longer ask pro- 
tection for the purpose of cultivating new or young 



THE TARIFF IN GERMANY 363 

branches of industry, but, without disguise, they de- 
mand a state guarantee by means of customs duties to 
procure a definite interest upon their capital and rent 
of land. They do not seek, by means of labor-saving 
machinery and the payment of good prices to intelli- 
gent labor, to furnish the products of the farm in 
abundance and cheaply; they do not resort to the in- 
tensive system of farming ; but they ask the state to 
come in and maintain the rent of their land and their 
rate of interest, and thus practically they establish state 
socialism as an example to the millions of laboring men 
in the factories of the towns and cities. Is it any 
wonder that socialism grows rapidly in Germany, that 
it already casts 3,000,000 of votes, that it has a large 
representation in the Reichstag and a majority of the 
voters in about all of the German cities, if not, by rea- 
son of the cumulative voting, a majority of the votes ? 
Mr. Dawson, in his excellent work "Protection in 
Germany" says: "The word [socialism] is like poison 
"on the tongue of the average Protectionist, whether 
"agrarian or industrialist, yet in effect his demand im- 
"plicitly concedes the Communistic principle. For if 
"the landowner is to be secured his rent, and the cap- 
"italist his interest, why not the merchant his profits, 
"the w^orkman his wages, the professional man his fees, 
"and everybody else his special form of remuneration? 
"But a system of universal bounties, under which every- 
"body is equally subsidized at the common expense — 



364 THE TARIFF AND THE TRUSTS 

'Svhich means in the last resort his own — would be 
''nothing less than Communism sans phrase. That 
''was why Count von Caprivi with statesmanhke fore- 
"sight ranked agrarianism with Social Democracy as 
"one of the revolutionary elements of society." 

Germany came forth from the war of France with a 
sense of strength and confidence. That feeling has 
communicated itself to the field of manufacturing, and 
in the exports of manufactured products she stands 
next to Great Britain. She has shown great vigor, 
enterprise, and ability in the prosecution of industries. 
But, to secure success, she must find vent for her manu- 
factures. Can she lead in the world's industries while 
she attempts to shut out the imports of grain and food 
from other countries ? 

It is apparent that the conditions in Germany to-day 
are almost identical with the conditions in England be- 
fore the repeal of the Corn Laws, and Cobdcn's argu- 
ments would apply equally as well as to England in 
1840. Germany's great landowners practically govern 
Germany. They have voted to themselves high cus- 
toms duties against the importation of all like products 
to their own. They have formed themselves into a 
vigorous fighting organization, and demand that agri- 
culture shall be regarded by the state as its primary 
concern and shall be given preference over every other 
interest. The cost of living has been greatly increased. 
Terrible burdens are thus placed upon the poorly paid 



THE TARIFF IN GERMANY 365 

factory operatives, and the agricultural laborers are in 
a condition little better than serfage. The shutting out 
of foreign agricultural products by reason of the high 
tariff and the consequent high prices of food affect 
manufacturing in precisely the same manner as the 
Corn Laws in England affected manufacturing in the 
forties. Will not the manufacturers soon appreciate 
this? Will Germany produce a Cobden or a Bright 
to lead the battle against the agrarians? Is the spirit 
which achieved the repeal of the Corn Laws living 
among the German manufacturers and the German 
workmen? In their very selfishness will not the 
agrarians eventually bring about a revolution? The 
liberty of the individual is none too well secured in 
Germany. The doctrine of lese majeste has been car- 
ried to lengths which astonish English-speaking peo- 
ple, and liberty of the press does not exist. Will power 
go on usurping more power, or will the people of 
Germany vindicate their rights? 



CHAPTER XI 



THE REMEDY 



When a particular wrong is clearly produced by a 
certain cause, it has ever been the policy of those who 
are responsible for the existence of the wrong and who 
desire its continuance to direct the eyes of the people 
to remedies which are not effective. This method has 
characterized legislation in this country in recent years. 
Great fortunes accumulated rapidly by reason of gov- 
ernmental favors have aroused much indignation among 
the people, and their unrest over these things has im- 
pressed the leaders of political parties. Consequently 
a few months ago the President, in a speech on a pub- 
lic occasion at Washington, brought forward a remedy 
for these conditions. He said : ''As a matter of person- 
al conviction, and without pretending to discuss the de- 
tails or formulate the system, I feel that we shall ulti- 
mately have to consider the adoption of some such 
scheme as that of a progressive tax on all fortunes, 
beyond a certain amount, either given in life or de- 
vised or bequeathed upon death to any individual — a 
tax so framed as to put it out of the power of the 
owner of one of these enormous fortunes to hand over 

366 



THE REMEDY 367 

more than a certain amount to any one individual ; the 
tax of course to be imposed by the national and not the 
state government." In other words, the policy of our 
President would seem to be to allow the continuance 
of the tariff, whereby immense sums of money are 
gathered into the hands of individuals and corporations, 
and then upon the death of millionaires take a portion 
of that wealth for the purposes of our government. 
Any such discrimination at death against the property 
of men of great wealth will imperil the right of all men 
to their property. Destroy privilege, and matters wili 
adjust themselves aright. It is in the interest of the 
poorest man in the United States, as well as the wealth- 
iest, that but one rule prevail as to the property of men, 
and that rule be one of justice. 

At Cincinnati, September 20, 1902, President Roose- 
velt said: ''If in any case a tariff is found to foster a 
monopoly which does ill, why of course no protection- 
ist would object to a modification of the tariff sufficient 
to remedy the evil." Here we have the wisdom of 
withdrawing the support of the tariff from monopolies 
made to depend upon whether the monopoly does ill. 
A monopoly to control the prices of commodities, in 
the nature of our modern trust, has been under the 
condemnation of the English Common Law for five 
hundred years. The fact that it was a monopoly con- 
trolling the prices of the commodities of life was suffi- 
cient to condemn it as one which did ilL A stock- 



368 THE TARIFF AND THE TRUSTS 

holder of such a monopoly who in a court either of law 
or equity attempted to enforce any rights springing 
directly out of the contract to form such a monopoly 
was simply turned out of court. This rule prevails as 
to our existing corporate monopolies in precisely the 
same way as it was applied in the Sugar and the 
Standard Oil Trust cases. It matters not whether 
some judge or jury may believe that the monopoly is 
a blessing to society, the question of its ill effect is deter- 
mined solely by finding that it is a monopoly to increase 
the prices of the necessaries of life. In a recent Eng- 
Hsh case the defendant had built a pier out into a navi- 
gable stream, the pier being of great convenience to 
the people. The jury found the fact that the alleged 
nuisance had been erected by the defendant, but that 
the inconvenience was counterbalanced by the public 
benefit arising from the alterations thus made. The 
court held that this finding amounted to a verdict of 
guilty, and stated a most salutary principle in the fol- 
lowing language: 'Tn the infinite variety of active 
operations, always going forward in this industrious 
community, no greater evil can be conceived than the 
encouragement of capitalists and adventurers to inter- 
fere with known public rights from motives of personal 
interest on the speculation that the changes made may 
be rendered lawful by ultimately being thought to sup- 
ply the public with something better than what it actu- 
ally enjoys." When government puts its hand upon 



THE REMEDY 369 

the private property of one citizen through a protective 
tariff and trust and turns that property over to increase 
the private property of another citizen, it is no longer 
free government, it is already a species of despotism, 
and though the forms of liberty may continue, the real 
liberty of the citizen is not worth a fig. 

Now let us examine another one of the spurious, 
showy, and sensational remedies invoked against the 
trusts. Everywhere in recent days those who have 
made the laws that brought trusts into being have at 
the same time been passing penal statutes to punish 
them. Persons creating a monopoly for the purpose 
of controlling the price of the necessaries of life are 
criminals under the common law, and they ought to be 
regarded as criminals. Their offence against society 
is a most grievous one. It is right that they should be 
punished, but what is wrong is that the penal statute 
Is brought forward by politicians and legislators as the 
only remedy for the sole purpose of diverting the peo- 
ple's attention from an efficient one. Even if legislators 
in good faith sought a criminal remedy against the 
abuses of the trust, they would seldom find themselves 
successful in a contest with the vigilant dexterity of 
these private interests. It is idle for the legislator to 
take action against the machinery which the trust uses 
to rifle the public's pocket and still leave the cause of 
the trust existing. Such statutes are the direct result 
of the action of demagogues and the teachings of sen- 
24 



370 THE TARIFF AND THE TRUSTS 

sational newspapers. In recent years they have been 
teaching the American people that all the evils of our 
civilization are political and can be remedied only by 
penal statutes. When the words of patriotism and 
pride *'I am a Roman citizen" were upon the lips of 
the great and virtuous men of the Roman republic her 
laws were few and simple and could be inscribed on 
twelve tables; but centuries later, when Rome was a 
city of palaces and her wealth was in the hands of a 
few men who were debauched by luxury, the Julian 
Law contained more than a hundred chapters against 
extortion. This indicated a condition where the rulers 
sought to restrain by legislation the passion for money 
which individuals had lost the power to control by 
moral restraint. In our own country the multiplication 
of penal statutes has a most ominous foreboding. Some 
student a thousand or two thousand years from now 
may be searching among our statutes for a diagnosis 
of the maladies which destroyed us, just as historians 
have seen in the Theodosian Code the evidence of the 
causes of Rome's decay. The politicians create the 
conditions out of which monopolies naturally arise, 
and then attempt to make political capital with the peo- 
ple by an attack upon the very evil which they have 
created. Newspaper editors, with apparent indigna- 
tion, assail the trusts and then show their insincerity 
by advising the passage of laws to punish trusts 
which they know or ought to know will never be en- 



THE REMEDY 371 

forced. Think of the ordinary American politician 
wishing to destroy the trust ! If the trust was destroyed, 
to what source would he turn for his campaign 
disbursements? In practical experience it is found 
that the public officers who owe their positions to a 
party that has received campaign disbursements from 
the trusts will not vigorously enforce the criminal stat- 
utes against them. In many cases the very official 
provided for the enforcement of the criminal law is a 
man who owes his nomination to the evil which he is 
expected to destroy. The law of the State of New 
York for thirty years has made the establishment of a 
monopoly to control the prices of the necessaries of 
life a misdemeanor, yet I can recall only two such 
prosecutions. During the same time there have been 
actually tens of thousands of violations of that law, 
violations which were open and above board, known of 
all men, but not punished in the State of New York. 

Are the results in the enforcement of the Sherman 
Anti-Trust Law in the United States Courts any more 
assuring of the efficiency of such penal remedies? 
Whenever a conviction occurs under this act great 
prominence is given to it in the newspapers, and we 
ought to know from these sources something about the 
number of criminal convictions. I make bold to say 
that there have been not to exceed twenty convictions 
in fifteen years In the United States Criminal Courts 
under this act, and that those have been largely con- 



372 THE TARIFF AND THE TRUSTS 

victions of servants or inferior agents of trusts. Repose 
the power in district attorneys to regulate monopolies, 
and you will find eventually that the monopoly will 
regulate its regulators. Repose the power in the cen- 
tral government to control the destinies of these great 
monopolies, and you will find that the freedom of the 
individual citizen is eventually impaired. In the tariflf 
enacted by the Australian Commonwealth Government 
it is provided that, in the event of it appearing that the 
manufacture or sale of any article is controlled by a 
trust, the Ministry of the day shall have the right and 
it shall be its duty, by an executive act, to temporarily 
abolish the protective duties upon the articles controlled 
by the trust. This power, however, is very liable to 
abuse. Why create the conditions which allow the 
trust to exist and then give power to some central body 
to either suppress or not suppress the trust as that 
power shall determine? The exercise of such a dis- 
cretion can generally be controlled in favor of the trust. 
The intervention of the United States government or 
the state governments into private business is a symp- 
tom which points to a time when your President or 
your Governor becomes a 'Tittle Father" who will 
benevolently control all private and individual affairs, 
and he will control them in the United States as he 
does in Russia, in the interest of the great and power- 
ful and with indifference to the welfare of the masses. 
The true remedy against our trusts is to seek out the 



THE REMEDY 373 

cause of a trust and to remove that cause. This is a 
perfectly simple and natural remedy, and lies close at 
hand. It applies to public matters the same rule of 
wisdom which men apply in their own affairs as to 
health, business, and every private transaction in the 
world. If typhoid fever or some other epidemic is 
sweeping over your community and you find that it 
results from sewage or some other physical cause, you 
will remove the cause and not rely solely upon the skill 
and remedies of medical practitioners. Some visitors 
who were being shown over a pauper lunatic asylum in- 
quired of their guide what method was employed to 
discover when the inmates were sufficiently recovered 
to leave. 

"Well," replied he, "you see, it's this way. We have 
a big trough of water and we turns on the tap. We 
leave it running, and tells 'em to bail out the water with 
pails until they've emptied the trough." 

"How does that prove it ?" asked one of the visitors. 

"Well," said the guide, "them as ain't idiots turns 
off the tap." 

Throw down the tariff wall which encircles every 
trust which is selling its domestic product at high 
prices, and at the same time selling in foreign markets 
at lower prices than at home, and let the trust contend 
with the full stream of international commerce. If it 
continues to exist, it will be because it sells its products 
at home for cheaper prices than the cost of the im- 
ported foreign product. 



374 THE TARIFF AND THE TRUSTS 

The trusts control a considerable proportion of the 
politicians, legislators, and newspapers in this country 
to-day. They are allied with the banking interests, 
give millions to charity, and are debauching the Ameri- 
can conscience through their campaign gifts. But 
slavery in the fifties ruled the country almost as ef- 
fectively, and when it stood at the very brink of war 
and disaster, it was apparently at the very height of its 
power. Read the history of How England Got Free 
Trade and you will see how this giant evil can be de- 
stroyed. The people must be aroused to the danger 
to their liberties as well as to their property from pro- 
tective tariffs and trusts. Our democratic govern- 
ment needs to-day leaders burning with indignation 
and horror at the injustice of this legalized robbery of 
the people. We need agitators like Garrison and Phil- 
lips, like Cobden and Bright, who hate in their hearts 
and with all the loathing of their souls this cruel in- 
justice. The people in each locality should be or- 
ganized into patriotic societies pledged to vindicate 
their rights against these oppressive trusts. Such an 
organization cannot be accomplished by men acting 
within the lines of existing parties. The whole 
party machinery is prepared and perfected with the 
idea of destroying the exercise by the people of any 
influence in the control of government. The political 
boss of a party in county, state, or nation practically 
nominates his candidates for office before the delegates 



THE REMEDY 375 

to conventions are elected. The delegates come to- 
gether in convention simply to ratify his selection. 
The same methods prevail in both parties, and when 
the people come to vote it is simply a choice between 
the boss of one party who is the tool of corporate in- 
terests and the boss of the other party who is also a 
tool of corporate interests, and the candidates of 
either party as a rule leave small choice to the voter. 
What a happy condition it would be if we possessed 
a few thousand men as loyal to the interests of their 
country as the politician is to his party! This would 
be the thinking patriotism upon which the German 
prides himself. The story goes that Napoleon and the 
King of Prussia were talking of the respective merits 
of their soldiers when Napoleon boasted that the 
French soldier was the most patriotic in all Europe. 
The Prussian King denied this. "Ah, let us see," 
cried Napoleon, and, summoning one of his guardsmen, 
he ordered him to jump out of a window which was 
forty feet above the ground. The guardsman saluted 
and jumped into eternity. Whereupon the King of 
Prussia ordered one his common soldiers to do the 
same thing, but the German drew himself up and 
asked, "Is it for the Fatherland?" Receiving the 
answer, "No, it is for myself," he turned on his heel 
and said: "Then I will not do it." Within the last 
few years a young politician in New York, of kindly 
and generous nature, on the morning of the day ap- 



376 THE TARIFF AND THE TRUSTS 

pointed for his trial on an indictment for a criminal 
offence jumped from the window of his apartment 
to death, and the newspapers declared that he did it to 
prove his loyalty to other politicians associated with 
him. I know not how this may be, but this I do know, 
that if men were one-half as loyal to their country as 
they are to party chiefs, such abuses as I have described 
in these pages could never have continued for forty 
years. The people have been following the leader- 
ship of politicians for so many years that they have 
lost to some extent the power of initiative, and though 
the forms of a democratic government exist, the 
spirit of democracy has fled. Again, political parties 
do not even differ on great public questions, and they 
regard such questions only as instruments of political 
advancement. The vital force of the two existing 
parties has been greatly impaired by reason of the 
loss of faith on the part of their leaders in the common 
sense and good judgment of the voters. These leaders 
have come to believe that the few are wise and the 
many are ignorant. On the contrary, the hugest 
wrongs and crimes in the annals of the race, the wars 
that have wasted the world and desolated mankind 
have been the work of the ruling minority and not of 
the masses of the people. The people are very much 
wiser than the politicians believe them to be. The 
party of the future which will do away with the usurpa- 
tions of government must have the courage and the 



THE REMEDY 377 

wisdom to plant itself on the unerring instinct of the 
masses of the people. ''The mind of a people may be 
considered as a great mind made up of millions of units, 
each almost insignificant if taken separately, but in 
most cases unerringly logical when acting as a whole. 
The instinct of a great people is as logical as the 
instincts of a wild animal." What the people need 
to see is that the power which is bestowed on party 
managers is just so much power subtracted from the 
just authority of the mass of the citizens, and that party 
leadership as it exists to-day is anti-democratic in 
all its tendencies. The creed that good becomes evil 
if carried on under one party and evil good if carried 
on under another is not calculated to bring into life 
great civic virtue or moral perception, and if free gov- 
ernment is saved in this country, it will be saved by 
men who will break with their party a hundred times 
over rather than see a continuance of the condition 
where vast wealth controls government, dictates the 
policies of parties, and takes unjustly from the citizen 
his hard-earned money to increase its millions. 

What we must have in this country if its institu- 
tions are to be saved is a rebirth of patriotism. The 
patriotism which we need is of an entirely different 
quality from that which demagogues describe. Like 
the Chinese, we have been indulging so long in ex- 
ultation over our greatness, we are instructed so 
thoroughly in the idea that our form of government 



3/8 THE TARIFF AND THE TRUSTS 

IS perfect, that we have come to beHeve that somehow 
it will perpetuate itself, and that we may without fear 
of invasion of our rights go to sleep. Constitutions 
however wise or laws however good will not perpetu- 
ate liberty. The Declaration of the Rights of Man 
did not save from death a single one of the innocent 
citizens dragged before the French Revolutionary 
Tribunal, nor did the American Declaration of In- 
dependence, with its proclamation of the inalienable 
rights of man, deliver a single negro from slavery. 
Let it become the fashion of the new patriotism to 
bravely tell the facts against us as well as for us. Let 
us see our faults while we hug our virtues. Self-com- 
placent dreams of sanguine optimism blind us to the 
real duties of patriotism. Although our people are 
made up of all the races of the world, the demagogue 
has made capital with them by attempting to create 
prejudice against foreigners and to attain his object 
in that way. After the expulsion of all other Euro- 
peans from Japan two hundred years ago the Dutch, 
as every student well knows, were allowed to retain 
a trading settlement in the Island of Nagasaki, but 
they were regarded, as ignorant and bigoted people 
are apt to regard foreigners, with suspicion, and it 
was dangerous to be friendly to them. It was taken 
for granted that a friend of foreigners must be an 
enemy to his native land. Hence to overcharge a 
Dutchman or to cheat and defraud him was looked 



THE REMEDY 379 

Upon as a patriotic act. Just so the demagogue, when 
you seek to relieve the people from the burdens of 
trusts resulting from the tariflf on foreign imports, 
cries out that you are acting in behalf of foreigners, 
that you are influenced by English gold, and there 
are not a few people in this country who are affected 
by such words. Indignation at the existence of wrong 
is an essential element of patriotism. When Dr. 
Franklin, as agent for the colony of Pennsylvania, 
was a witness before a Committee of the English 
House of Commons considering the duties imposed 
upon imports to the colonies, one of the members 
said to him : "You cannot get along without our woolen 
goods, you must have them." "We can get along 
without them," responded Dr. Franklin indignantly. 
"And how can you get along without them ?" said the 
member. "We will eat no more lamb, we will grow 
our own wool, we will make our own woolens." These 
words were the expression of the true American 
spirit which gave birth to free government on this 
continent. Can the Sons and Daughters of the Revo- 
hition find any better field for patriotic labor than in 
seeking a rebirth of the patriotism which will free our 
country from a burden a hundred times more oppres- 
sive than the slight taxes which led to the Revolution- 
ary War? Let men in all walks of life gather into 
societies and cultivate a new patriotism without which 
the spirit of liberty will be destroyed in this country. 



380 THE TARIFF AND THE TRUSTS 

Let the people come together, not as Republicans nor 
as Democrats but as Americans loving their country 
and ready to join battle against the interests which 
corruptly rule it. There is no other question of im- 
portance before the country. It is simply a fight at 
close quarters between the people and this mighty sys- 
tem of wrong and corruption. In order that such 
patriotic societies should be beneficial, their chief ob- 
ject must be the discussion of public questions. Thirty 
or forty years ago men had convictions upon public 
questions and felt intensely over them. At every 
cross-road and village hamlet throughout the land 
you would find men whittling sticks and talking poli- 
tics, and often the opinions of that class of men were 
quite as sound upon public questions as those of their 
representatives in Congress. Our exclusive atten- 
tion in these days to the newspapers, with their myriad 
disconnected items of fact and fancy, tends to blind 
us to the importance of great events, upon which may 
hang the whole future of our civilization. Our peo- 
ple are ceasing to be jealous of the infringement of 
their liberties, and are becoming altogether absorbed 
in one end, the making of money. Establish in each 
village and hamlet in this country a debating society 
where everyone can meet and discuss public questions, 
and you will do more to destroy the existence of the 
boss and the corruption of public life than in any 
other possible way. The door to such a society should 



THE REMEDY 381 

be as wide as humanity. Hear not only wise men, 
but fools, upon every subject, and if the debate does 
not enHghten it will surely benefit the debaters, and 
when you have reached conclusions upon the justice 
or injustice of our protective system, send delegates 
to a general convention and frame your demands upon 
political parties. Give no support to the party which 
will not specifically agree to your propositions in its 
platform. A platform dealing in political generalities 
is not to be relied on. It is idle to call our tariff a 
robber tariff, and, after the people have sustained you, 
disappoint their hopes by enacting a high tariff Wilson 
Bill. For at least twenty years the producers of every 
product now made by the United States Steel Corpora- 
tion, with the exception of tin plate, have been able to 
produce them cheaper than their foreign competitors. 
Yet during all that period those producers have en- 
joyed protection in the amount of about 50 per cent, 
upon their products, and have unjustly taken from 
the American people billions of dollars. The duties 
on iron ore, pig iron, steel, tin plate, wool, woolen and 
cotton cloth, hides, sole leather, borax, lumber, paper, 
lead, refined sugar, salt, and chemicals should be re- 
pealed, and unless a political party in its national plat- 
form will specifically agree to repeal those duties, the 
people should refuse to support its candidates and 
should meet in national convention and nominate their 
own candidates. Support no Congressman who will 



382 THE TARIFF AND THE TRUSTS 

not specifically agree in writing to repeal these duties. 
A considerable organization of citizens, having no 
other motive than the public welfare, refusing to act 
within party lines and giving its support only to that 
party which specifically agrees to vote for the public 
purposes declared to be beneficial by such an organiza- 
tion, can make itself all-efficient in remedying present 
conditions. An organization of this kind formed 
within either party to influence i^s action will effecL 
very little. Every Congressman feels that the power 
exercised by political parties in practically fixing the 
price of the necessaries of life through tariflfs is a 
power which he cannot afford to part with, and he will 
continue to use this power for the benefit of great 
corporations until he sees that the people are in earnest 
and determined to have their rights. The way for 
the people to secure those rights and to perpetuate 
free government is to insist upon and obtain in both 
state and national government the right to the Refer- 
endum. For many years by the provisions of the 
Swiss law important public questions have been sub- 
mitted to the people for their direct determination by 
ballot. The traveler through the mountain passes in 
Switzerland will find in many villages liberty halls 
where the people assemble and discuss these public ques- 
tions. The Referendum is the cause of this discussion. 
If we would stimulate discussion upon public questions 
and preserve our free institutions, the attention of the 



THE REMEDY 383 

people must be directed not to political parties, not to 
party leaders, but to the merits of proposed legisla- 
tion; and no way will be found more efficient to at- 
tain this end than the direct submission to the people 
of important laws. Submit directly to the people 
the question of the continuance of the Dingley Tariff, 
give them an opportunity to discuss among themselves 
the matter upon its merits and take their decision 
thereon unaffected by allegiance to political parties, 
and the great mass of the people would vote against 
this system which extorts hundreds of millions, if not 
billions, of dollars each year from their hard earnings. 
May the people see their danger and wage a successful 
battle. 



INDEX 



Agrarians, 348-352. 
American Brass Co., 'j^, 
American Hide and Leather Co., 

79. 
American Linseed Co., 75. 
American purchasers of English 

tramp ships, 93, 94. 
American shipping, decadence of, 

107-109. 
American Thread Co., 'j^y. 
American Woolen Co., Tj, 
Anthracite coal, 75, note. 
Anti-Corn Law League, 303, 304, 

306-309; activity of, 321-3221 

329. 

Balance of trade theory, its ori- 
gin, 298. 

Beef Trust, 39, 138. 

Bismarck, a free trader, 336, 338, 
339; reasons for adopting pro- 
tection, 339-342; result of 
change, 343» 344- 

Boots and shoes, 39, 40. 

Borax Trust, 63-65. 

Bright John, 315, 320, 321. 

Buying votes, 124, 125. 

California Fruit Canners' Asso- 
ciation, 77. 

Calumet and Hecla Mining Co., 
279-281. 

Canadian and American Manu- 
facturers* Associations, tyranny 
over retailers, 67-70. 

Caprivi, negotiates commercial 
treaties, 344. 345*, results of, 
348. 

Cement, 41. 



Centralization of government, re- 
sults from tariff, 134-137, 372. 

Chartists, 308, 309; riots 317, 
318. 

China, exports to, 148, 149; J. J. 
Hill's comment, 169-171. 

Cobden, early life, 305, 306; work 
against the Corn Laws, 311, 
313, 314; attack on Peel, 318- 
320. 

Competition, opinions on by 
Sherman, 58; Blaine, 58; Car- 
negie, 58. 

Congressmen and the Trusts, 220, 
221. 

Corruption fostered by tariffs, 
1 17-124; as to newspapers, 130, 
131; business men, 131, 132; 
beneficiaries, 140-145. 

Cotton, 24, 158, 259, 265. 

Cotton Oil Trust, 78. 

Cummings, Governor, on Dingley 
Tariff, 3- 

Diamond Match Co., 66y 76. 
Dingley Tariff, high prices, 17, 

18, 19. 
Discussion, suppression of, I45" 

147. 
Druggists, National Association, 

66. 
Duties, effect of specific upon the 

poor, 25-28, 208, 209; excessive, 

42. 

Embargo of 1808, 256. 
Emerson on protection, 168, 169. 
Enemies of the Republic, 127. 
English Custom Laws, 299-301. 



384 



INDEX 



English iron masters* petition for 
free iron in 1756, 249, 251. 

English laborers, condition before 
repeal of Corn Laws, 314-317, 
324, 326. 

Expatriation of American indus- 
tries, 173-175; of German in- 
dustries, 355. 

Exports, comparative of manu- 
factures of Great Britain, Ger- 
many, France and U. S., 100- 
loi, 169, 206, 207. 

Exports to Germany, Convention 
of 1900, 346. 

Famine in Ireland, 327. 

Farmers, manufacturers before 
the war, 222; exporters, 223, 
224; deceptive protection for 
them, 224-228; comparative size 
of farms in U. S. and Europe, 

229, 230; cost of farm labor, 

230, 231; exports reduced by 
tariff, 231, 233; burdens in- 
creased, 44, 234-238; pauper 
labor argument, 238-240; pros- 
perity argument, 240, 241; pros- 
perity from 1850- 1 860 under 
Free Trade, 242, 243; condi- 
tion under Wilson Tariff, 243, 
244; land trust of the railways, 
245, 246. 

Fertilizer Trust, 78. 

Feudal System of the Tariff, 42, 
43. 

Financial Depressions, of 1837, 
261-264; of 1857, 273, 274; of 
1893, 294, 295. 

Flour Mills, 159, 160. 

Food, horseflesh in protected 
countries, 213, 214. 

Foreign-built ships, registry for- 
bidden, 90-93; Cleveland's com- 
ment, 95, 96; New England's 
agency, 96, 97. 

Forests, destruction of, 62^ 160. 

Franco-German War, evil effects 
of indemnity, 337. 



Free raw material, 148, 150-154, 

158. 

Free Trade fosters shipping, 102- 

106; England an example, 112* 

115. 
Fruit growers, 228, 229. 
French treaty, 163-165. 

German tariffs, of the i8th Cen- 
tury, 333, 334; tbe Zollverein 
335» 336; reductions of 1873 
and 1875, 338; of 1879, 342; of 
1903, 352-355. 

German tariff war with Russia, 

346. 

Germany, trusts, 355, 356; con- 
dition of agriculture and farm 
laborers, 356-362; of operatives, 
360, 361; chemical industry, 
362; similarity to England be- 
fore the repeal of the Corn 
Laws, 364, 365. 

Gladstone, completes Peel's work, 
331, 332. 

Glass Trust, 37-39, 77* 

Glucose Trust, 77- 

Great Britain, trade policy toward 
our colonies, 248, 249; recent 
growth in wealth, 331, 332. 

Hamilton Tariff, S- 
Hardware, 40, 41. 
Harrisburg Convention, 259. 

Imports mean exports, 171 » ^72- 

Indirect taxation, burdens upon 
the poor, 44-46, 216, 217, 289- 
291; results in surplus and 
deficit, 132; public extravagance, 
133, 134; tariff wars, 134. 

Infrnt industries, woolen, 21, 22; 
cotton, 24, 25; silk, 25; iron 
and steel, 28, 29. 

Internal taxes, 275, 276, 283. 

International Harvester Co., 76. 

International Paper Co., 59-63' 

Iron and steel, 28-33. 



25 



385 



INDEX 



Labor, under high and low tariffs, 
183-206; no tariff upon, 212; 
condition in protected coun- 
tries, 213, 214; changed con- 
dition since 1842, 215, 216; un- 
der Free Trade, 218. 

Lead and chemicals, 158. 

Living, increased cost of, 17, 18, 
44, 45, 207, 208, 234-238. 

Lumber, 41, 42. 

Machinery Trust, 78. 

McKinley Tariff, 289-291, 

Marble, duty, 283. 

Manufacturers as U. S. Senators, 
127-130. 

Manufacturing, our superiority, 
6-13; Leroy-Beaulieu*s com- 
ment, 15-17, cheapness of our 
iron and steel, 29, 30, 175, 176. 

Meat Trust, 74, 39, 138. 

Milk Sugar Trust, ^(i, 

Mills Bill, 289. 

Monopolies, early English, 297, 
298. 

Morrill Tariff, 5, 275, 2^6, 

Morrison Bill, 288. 

National Biscuit Co., ^T, 

National Lead Co., 75. 

Natural resources of U. S., 14, 

15, 149, 150. 
Navigation Act, English, no, in. 
New England industries, 160-163, 

180. 
New York, anti-trust law, 50, 51. 
Nickel, duty, 283. 
Non-competing imports, removal 

of, 285. 

Panama Canal Commission, pur- 
chases, 70, 71. 

Peel, Sir Robert, Prime Minister, 
310, 311; income tax and repeal 
of duties on raw materials in 
1842, 312, 313; removal of 
duties in 1845, 335; repeal of 
Corn Laws, 328-330; resigna- 



tion, 330; words on resigning, 
219. 

Pitt, William, policy toward 
colonies, 252, 299. 

Plate Glass Trust, 37, 38, 65, 66. 

Presidential campaign of 1888, 
289. 

Protection, not demanded by la- 
bor cost, 209, 210; exceeds 
whole labor cost, 210-212. 

Protection and Patriotism, 137- 
140. 

Protection, opinions upon by 
Hamilton, 253, 254; Madison, 
254; Jefferson, 255; Clay, 256; 
Webster, 257; John Randolph, 
258; Calhoun, 259. 

Remedies, penal, their futility, 
369-372; removal of causes, 
372, 373; true patriotism, 374* 
375, 377-379; destruction of 
party government, 376, 377; 
public discussion and referen- 
dum, 380-383. 

Rotten boroughs, 301, 302. 

Russell, Lord John, defeat of 
Ministry, 310, 311; a free- 
trader, 328. 

Sargent, John B., on free raw 

material, 154-156. 
Ships, comparative cost in U. S. 

and Europe, 97-100. 
Ship subsidies, 109. 
Silk, 25. 
Socialism, resulting from trusts, 

81-84; from German tariffs, 

85, 363, 364; in the U. S., 85, 

86; inconsistent with English 

law, 87. 
Standard Oil Co., 74, 75, note. 
"Stand-patters," 43» 44- 
State tariffs under the Federation, 

Pennsylvania, 249. New York, 

252, 253. 
Steel rails, 30-33, 282. 



386 



INDEX 



Sugar, 36, z-j, 49, ^1, 75, 165- 
167, 292, 393, 325. 



Tariff Commission of 1882, 285, 
286. 

Tariffs, of 1789, 253-255; of 1816, 
256; of 1824, 258, 259; of 1828, 
259, 260; of 1832 and 1833, 

261; of 1842, 2^(i\ of 1846, 2^^' 

273; of July 14, 1862, 275; of 
June 30, 1864, 2ys-277\ of 1867, 
278; of 1872, 283, 284; of 1883, 
286-288; of 1890, 289-291; of 
1894, 291-294. 

Tariffs written by manufacturers, 
126. 

Tin Can Trust, 78. 

Tin Plate, 34-36. 

Tobacco Trust, 66. 

Trusts, ancient, 47-49; result 
from tariff, 51-54; instability 
of prices, 54, 55, 177-179; in 
England, 55, 56, 57; number 
of, 79; alleged reasons for, 79, 
80; in America and Europe, 
80; "a monopoly which does 
ill," 367-369. 



United Lead Co., 75. 

U. S. Steel Corporation, home 
and foreign prices, 32-34; 
structural steel, 41; trust, 71- 
74; see Iron and Steel rails. 

•^ Wages, under high and low tar- 
iffs, 195-198; Farquhar's com- 
ment, 156; tariff ' does not 
make high wages, 182-188; 
comparison between protected 
and unprotected industries, 192- 
194; true measure of day's 
wage, 207, 208. 

Wages in free-trade England 
and protected Europe, 188-190, 
192. 

Wages in free-trade New South 
Wales and protected Victoria, 
192. 

Walker Tariff, prosperity under, 
268-273. 

War of 1812, 256, 257. 

Watch Trust, 67, 

Wells, David A., 277. 

Woolens, tariff, 19-23, IS7» 'SS, 
259, Syracuse Convention, 278; 
increased duties, 278, 279. 



387 



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By John Spargo 
"One of the ablest expositions of Socialism that has ever been 

written." — New York Evening Call. 

8 



Tarbell — History of Greek Art 
By T. B. Tarbell 
" A sympathetic and understanding conception of the golden age of 
art." 

Valentine — How to Keep Hens for Profit 

By C. S. Valentine 
" Beginners and seasoned poultr3maen will find in it much of value." 

— Chicago Tribune. 

Van Dyke — The Gospel for a World of Sin 

By Henry Van Dyke 
"One of the basic books of true Christian thought of to-day and of 
all times." — Boston Courier, 

Van Dyke — The Spirit of America 
^Y Henry Van Dyke 
" Undoubtedly the most notable interpretation in years of the real 
America. It compares favorably with Bryce's * American Common- 
wealth.' " — Philadelphia Press. 

Veblen — The Theory of the Leisure Class 

By Thorstein B. Veblen 

"The most valuable recent contribution to the elucidation of this 
subject." — London Times. 

Wells — New Worlds for Old 
By H. G. Wells 
" As a presentation of Socialistic thought as it is working to-day^ this 
is the most judicious and balanced discussion at the disposal of the 
general reader." — World To-day. 

White — The Old Order Changeth 
By William Allen White 
" The present status of society in America. An excellent antidote to 
the pessimism of modern writers on our social system." — Baltimore 
Sun. 

9 



THE MACMILLAN FICTION LIBRARY 



A new and important series of some of the best popular novels which 
have been published in recent years. 

These successful books are now made available at a popular price in 
response to the insistent demand for cheaper editions. 



Each volume, cloth, 12mo, SO cents net; postage, 10 cents extra 



Allen — A Kentucky Cardinal 

By James Lane Allen 
"A narrative, told with naive simplicity, of how a man who was 
devoted to his fruits and flowers and birds came to fall in love with a 
fair neighbor." — New York Tribune, 

Allen — The Reign of Law A Tale of the Kentucky Hempfields 

By James Lane Allen 
" Mr. Allen has style as original and almost as perfectly finished as 
Hawthorne's. . . . And rich in the qualities that are lacking in so 
many novels of the period." — San Francisco Chronicle, 

Atherton — Patience Sparhawk 
By Gertrude Atherton 
"One of the most interesting works of the foremost American 
noveHst." 

Child — Jim Hands 

By Richard Washburn Child 
"A big, simple, leisurely moving chronicle of life. Commands the 
profoundest respect and admiration. Jim is a real man, sound and 
fine." — Daily News, 

Crawford — The Heart of Rome 

By Marion Crawford 
" A story of underground mysterie." 

Crawford — Fair Margaret : A Portrait 
By Marion Crawford 
"A story of modern life in Italy, visualizing the country and its 
people, and warm with the red blood of romance and melodrama.' ' — 
Boston Transcript. 



Davis — A Friend of Caesar 

By William Stearns Davis 
" There are many incidents so vivid, so brilliant, that they fix them- 
selves in the memory." — Nancy Huston Banks in The Bookman, 

Dnunmond — The Justice of the King 
By Hamilton Drummond 
" Read the story for the sake of the living, breathing people, the ad- 
ventures, but most for the sake of the boy who served love and the 
King." — Chicago Record-Herald. 

Elizabeth and Her German Garden 

"It is full of nature in many phases — of breeze and sunshine, of the 
glory of the land, and the sheer joy of living." — New York Times. 

Gale — Loves of Pelleas and Etarre 

By Zona Gale 
"... full of fresh feeling and grace of style, a draught from the 
fountain of youth." — Outlook. 

Herrick — The Common Lot 

By Robert Herrick 
"A story of present-day life, intensely real in its picture of a young 
architect whose ideals in the beginning were, at their highest, aesthetic 
rather than spiritual. It is an unusual novel of great interest." 

London — Adventure 
By Jack London 
" No reader of Jack London's stories need be told that this abounds 
with romantic and dramatic incident." — Los Angeles Tribune. 

London — Burning Daylight 
By Jack London 
^* Jack London has outdone himself in * Burning Daylight.' *' — The 

Springfield Union. 

Loti — Disenchanted 

By Pierre Loti 
" It gives a more graphic picture of the life of the rich Turkish women 
of to-day than anything that has ever been written." — Brooklyn Daily 
Eagle. 

II 



Lucas — Mr. Ingleside 
By E. V. Lucas 
** He displays himself as an intellectual and amusing observer of life's 
foibles with a hero characterized by inimitable kindness and humOr." 

— The Independent. 

Mason — The Four Feathers 
By a. E. W. Mason 
^^^The Four Feathers' is a first-rate story, with more legitimate 
thrills than any novel we have read in a long time." — New York Press. 

Norris — Mother 

By Kathleen Norris 
" Worth its weight in gold." — Catholic Columbian. 

Oxenham — The Long Road 

By John Oxenham 
" ' The Long Road ' is a tragic, heart-gripping story of Russian politi- 
cal and social conditions." — The Craftsman. 

Pryor — The Colonel's Story 

By Mrs. Roger A. Pryor 
*' The story is one in which the spirit of the Old South figures largely ; 
adventure and romance have their play and carry the plot to a satisfy- 
ing end." 

Remington — Ermine of the Yellowstone 

By John Remington 
"A very original and remarkable novel wonderful in its vigor and 
freshness." 

Roberts — Kings in Exile 

By Charles G. D. Roberts 
" The author catches the spirit of forest and sea life, and the reader 
comes to have a personal love and knowledge of our animal friends." 

— Boston Globe. 

Robins — The Convert 

By Elizabeth Robins 
" ' The Convert ' devotes itself to the exploitation of the recent suf- 
fragist movement in England. It is a book not easily forgotten, by any 
thoughtful reader." — Chicago Evening Post. 



Robins — A Dark Lantern 

By Elizabeth Robins 
A powerful and striking novel, English in scene, which takes an essen- 
tially modern view of society and of certain dramatic situations. 

Ward — David Grieve 

By Mrs. Humphrey Ward 
" A perfect picture of life, remarkable for its humor and extraordinary 

success at character analysis." 

Wells — The Wheels of Chance 
By H. G. Wells 
'' Mr. Wells is beyond question the most plausible romancer of the 
time." — The New York Tribune, 



THE MACMILLAN JUVENILE LIBRARY 



This collection of juvenile books contains works of standard quality, 
on a variety of subjects — history, biography, fiction, science, and poetry 
— carefully chosen to meet the needs and interests of both boys and 
girls. 

Each volume, cloth, 12mo, SO cents net; postage, 10 cents extra 



Altsheler — The Horsemen of the Plains 

By Joseph A. Altsheler 
" A story of the West, of Indians, of scouts, trappers, fur traders, and, 
in short, of everything that is dear to the imagination of a healthy 
American boy." — New York Sun, 

Bacon — While Caroline Was Growing 

By Josephine Daskam Bacon 

" Only a genuine lover of children, and a keenly sympathetic observer 
of human nature, could have given us a book as this." — Boston Herald. 

Carroll — Alice's Adventures, and Through the Looking Glass 

By Lewis Carroll 
'' One of the immortal books for children." 

Dix — A Little Captive Lad 

By Marie Beulah Dix 
"The human interest is strong, and children are sure to like it." — 
Washington Times. 



Greene — Pickett's Gap 
By Homer Greene 
" The story presents a picture of truth and honor that cannot fail tc 
have a vivid impression upon the reader." — Toledo Blade. 

Lucas — Slowcoach 

By E. V. Lucas 
"The record of an English family's coaching tour in a great old- 
fashioned wagon. A charming narrative, as quaint and original as its 
name." — Booknews Monthly. 

Mabie — Book of Christmas 
By H. W. Mabie 
" A beautiful collection of Christmas verse and prose in which all the 
old favorites will be found in an artistic setting." — The St. Louis Mir- 
ror. 

Major — The Bears of Blue River 

By Charles Major 
" An exciting story with all the thrills the title implies.'^ 

Major — Uncle Tom Andy Bill 

By Charles Major 
"A stirring story full of bears, Indians, and hidden treasures." — 

Cleveland Leader. 

Nesbit — The Railway Children 
By E. Nesbit 
"A delightful story revealing the author's intimate knowledge of 
juvenile ways." — The Nation. 

Whyte — The Story Book Girls 
By Christina G. Whyte 
" A book that all girls will read with delight — a sweet, wholesome 
story of girl life." 

Wright — Dream Fox Story Book 
By Mabel Osgood Wright 
" The whole book is delicious with its wise and kindly humor, its just 
perspective of the true value of things." 

Wright — Aunt Jimmy's Will 

By Mabel Osgood Wright 
" Barbara has written no more delightful book than this." 

14 



